Exporting: How Irish Businesses Can Get Started


Demand for Irish exports has reached record levels. But how do you know whether your business has what it takes to go global? Recent figures from data group Trading Economics revealed that exports from Ireland rose 21.1% year on year to reach an all-time high of €12.21bn in November 2018. Here are some tips for exporting and how your business can started:

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Carving out an overseas market and giving your product a presence abroad is one of the most sure-fire ways to scale up your company, with exporters a third more productive in the first year alone, according to business support organisation Business West. But getting your exporting off the ground can be a challenge for SMEs given extra costs, regulations and cultural uncertainties.

So, what do you need to know before you get started?

Are you ready to export?

To begin with, businesses need to look at their current strengths and weaknesses.

They need to consider whether they have built up a level of domestic success that they can demonstrate to overseas buyers. They also need to look at their business model; whether they have the financial strength and staffing depth to manage an export operation and handle extra sales.

There will be a whole raft of extra costs to consider from transporting goods, to currency exchange as they convert dollars or pound sterling into euros. Businesses may need to create a dedicated role and department to deal with export issues and operations.

Business leaders need to ask themselves a number of questions: Are they financially stable enough to cope with growth? Could they increase production to meet demand and would they need to add to their workforce? Do they have the right skills, or should they remain focused on their home market?

Pascal Köenig, communications and public affairs manager at the Irish Exporters Association, says: “Is it worth taking the extra risk of investing money in entering a new market? It’s very specific to every single business to assess whether you are ready.”

Recommended reading: Embarking On International Business

Researching and pinpointing your overseas markets

SMEs need to determine which overseas market will best fit their product or service. Is their offering replicated in other markets and as such may suffer from competition? Or will it be seen as innovative? Will there be customer demand either way?

Price point is also a significant factor to consider. Look at competitors or other new entrants and try and gauge a satisfactory level. At the same time, it is important to re-evaluate your design in relation to your new target audience. Will your packaging, branding and marketing styles fit into this market? Considering cultural, economic and demographic trends and whether you may have to modify your product accordingly is key.

Businesses also need to determine how they will enter the market and what partners they need. Will you be seeking distributors to sell your product or set up your own factory or office? Does that mean recruiting overseas staff or moving some of your existing team abroad?

“For a first-time exporter, trading in Northern Ireland is the perfect place to begin. It is geographically closer, there are no language barriers and companies can gain valuable experience managing a different currency”

Alison Currie, Operations Manager, Trade Programmes, InterTradeIreland

SMEs should carry out desk research on potential markets as well as hopping on a plane and speaking to potential clients in person. Visits to trade or consumer shows can also provide valuable information on trends, tastes and demand.

Of course, you don’t need to look too far from home. InterTradeIreland encourages SMEs to export into Northern Ireland as it is the nearest market and often acts as a stepping stone for exporting off island.

Alison Currie, operations manager of trade programmes at InterTradeIreland, says: “For a first-time exporter, trading in Northern Ireland is the perfect place to begin. It is geographically closer, there are no language barriers and companies can gain valuable experience managing a different currency before moving into other UK markets.”

Securing export finance

Cash flow is king for exporters, particularly with often large upfront costs arising from producing, shipping and delivering goods. There are also the running costs of exporting, including visits, translation services, marketing and potentially deteriorating exchange rates.

While at home, buyers will either pay upfront or have contractual payment terms, these can be longer than you are used to with Middle Eastern firms, for example, which may work on 120-day payment terms. Your cash flow will be at risk if payment is delayed or bad debt begins to form.

Putting in place secure credit terms, contractual conditions and carrying out background credit checks on buyers can help. Export finance also plays a role: from letters of credit where your bank pays you and then collects payment from the buyers bank at a later date, to invoice discounting where cash is advanced against invoices. Securing export credit insurance can also be beneficial.

Recommended reading: Top Tips for How to Go Global

Getting to grips with export compliance

You need to ensure that you comply with the export and import regulations of your native country and your destination.

Some goods, for example, are restricted or prohibited from being exported, including some chemicals, agricultural and food products. For these you need to secure a special export licence.

The EU operates a Customs Union where trade is tariff free. But when it comes to non-EU countries you need to understand the market access conditions of each territory you are exporting to – do they have export barriers in place, tariffs and import duties or regulations around labelling, for example?

You are responsible for producing export and import documents to ensure your products make it through customs clearance. This includes a commercial invoice, bill of lading, packing list and insurance documents. For more information, visit the Irish Revenue website here.

Choosing a freight forwarder and transport mode

You need to get your product to its destination in the most cost-effective way either by land, sea or air. Most exporters use freight forwarders who can do the selection, negotiating and booking of hauliers, ships or planes for you. They are familiar with the export and import rules and regulations of foreign countries and the necessary trade documents.

You can find a freight forwarder either through word of mouth by talking to other exporters or via online platforms that compare freight rates.

“Using a logistics partner allows you to focus on what you do best – producing and manufacturing your product,” says Köenig of the IEA.

Recommended reading: How to Choose a Freight Forwarder

Other considerations

Protect your intellectual property, trademarks and copyright abroad. You could file separate IP applications in individual countries or make use of an international agreement allowing you to file in several countries through one application. Get advice from an IP attorney.

Talk to the experts

Enterprise Ireland offers a range of services, including Export Awareness seminars. Its Mentor Network offers advice and guidance and its Market Research Centre provides market information reports to help country selection. “Entrepreneurs new to exporting need help understanding their potential markets,” says Teri Smith, manager of the high potential start-up division at Enterprise Ireland. “They might not have sold in that market before or they are very technologically driven and are not used to selling.”

Bord Bia, the Irish Food Board, offers online export advice for SMEs as well as organising market study visits in Europe. The Irish Exporters Association provides export services, training and networking opportunities with Irish ambassadors, while grants such as the Local Enterprise Office’s Small Exporters Grant Scheme are also available.

An exporter’s view

Ian Harkin, founder of Donegal toy firm Arklu, says: “Our dolls are sold in 36 countries via a distribution network, with the US and UK as our biggest markets. Initially, we launched ourselves online in English-speaking countries, and then exhibited at major trade fairs to pick up local distribution partners and major retailers.

“The key is getting good local distribution – if you can get a distributor to believe in your brand and to invest in the local marketing this is an absolute winner. My advice to exporters is to start building your audience through social media and then analyse that data to help you make the decision of where to go first.”

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