Getting It Right With Exports

Getting It Right With Exports

In focus – Brexit: How can you build bridges overseas without overstretching your small business?

“This is a long-term decision,” says Joe Healy, Enterprise Ireland’s division manager of the High Potential Start-up Unit. “To build an international customer base takes time; it’s costly to set up, and in order to succeed, the board has to be fully committed.”

The key is to avoid spreading yourself too thinly, Healy says. “Aim to do well in a carefully chosen number of markets; perhaps even just one key market to begin with. As with all good business decisions, it’s about finding the low-hanging fruit. Can you get an entry point from existing customers?”

The main risk you face when building exports is overcommitting. “The time it takes is guaranteed to be longer than you plan for. This is because it’s a step beyond your normal business practice. You need to really understand the market.” Don’t automatically expect that what works at home will work further afield: “You have to know what makes people buy. Who are your competitors; is the market saturated?”

Not having enough resources is the other key pitfall for companies when they’re exporting. “It’s important to get boots on the ground. If you make the wrong hire, that can set you back; it needs careful thinking.” But equally, Healy says, don’t hire an agent and then leave them to arrange things for you at arm’s length. “You have to commit to support the staff, especially in the first year – spend time on that relationship.” All this also applies to partners, resellers and distributors. “Manage them as if they’re part of your own team.”

Choosing the right market

If expanding without overstretching is key, what kind of market should start-ups choose to expand into? Simon McKeever, CEO of the Irish Exporters Association, says: “The UK is straightforward, and Europe is easy enough, as travelling there is quick.”

Further afield, however, things get more complex. “When you’re exporting to the Middle East and Asia Pacific, people expect meetings regularly,” he says. “So you have extensive costs all of a sudden – are you geared up for those costs? Do you have the time, energy, resources and commitment from your management team to spend time there prospecting?” Additionally, simply being successful brings further implications. “If it’s a product, do you need to make more? Does it need adjusting for different markets? More finances and more capacity are needed.”

Both Enterprise Ireland and the Irish Exporters Association offer start-ups go-to advice for building their strategy. “We have officers around the globe, and we have both sector expertise and company expertise,” says Healy. “We can help start-ups identify how best to address the market, put them in touch with the right people, help with the export plan, and help build sales overseas. The key is to have a team-based approach to going global.”

Foreign regulations

Legislation issues are also key – less of an issue when exporting to the UK and Europe, but much more attention needs to be paid to different regulatory environments when going further afield, where tariffs can also be an issue. This leads us inevitably to Brexit: are there opportunities for Ireland, or will it cause exporters problems?

“Brexit is a huge problem for Ireland,” says McKeever. “I think we’ll end up with collateral damage from the UK’s negotiations with the EU.”

“Aim to do well in a carefully chosen number of markets; perhaps even just one key market to begin with”

Joe Healy, division manager, High Potential Start-up Unit, Enterprise Ireland

Any opportunities? “Yes, in the finance sector particularly, and from a supply chain point of view, if there are cross-border tariffs (and I can’t see how there won’t be) it may mean more localisation of supply chains in the UK and Ireland.” The Republic may well switch supply chains to the EU. Alternatively, “it’s clear to us from our large members that they may need to consider setting up production in the UK to safeguard the sales they have there”.

What about trying to generate international reach with an online business? “It’s a tough business to be in and not a panacea if you’re experiencing problems offline,” says Healy. “You really need to maximise SEO to drive your scores. Are you spending money wisely to build up a customer base?”

Essentially, Healy says, online business “is metric driven and boils down to the cost of acquisition. There’s potentially a huge pool of customers – but how much does it cost you to cut through that noisy environment and get people to buy from you?”

Case study: XtremePush

Tommy Kearns is CEO of XtremePush, a multichannel engagement platform. “Our software goes into mobile and online apps and we operate in sectors like aviation, hospitality and publishing,” he says.

The company helps large enterprises understand their customers better by analysing data about their likes and interests, aiming for three major outcomes: “We offer a better user experience; we reduce costs for the enterprise; and we increase opportunities for revenue.” Key global markets for XtremePush are Eastern Europe, MENA (Middle East and North Africa), the US and the UK.

“Regulatory problems are a challenge in the US at the moment,” Kearns says. “Agreeing contracts can be hard, because clients want details on their own terms.” Avoiding pitfalls means having tight policies around payment terms. “Large organisations often don’t understand the realities of running an SME where you have to watch every dollar that goes out and comes in to ensure good cash flow.”

Successful export strategies – checklist

Cash flow is king: “Don’t leave fundraising too late,” says Joe Healy. “There will be gaps in your management team so build them up to win in the medium to long term. Maintain your focus; it’s vital to keep a close eye on where the opposition is and where you can bring in money and grow the business.”

It will take longer and cost more than you think: “What about your logistics; shipping costs?” says Simon McKeever. “Make sure you’ve done your research before you go to market.”

Be aware of cultural and regulatory differences: “The legals are important, especially cross-border,” says Tommy Kearns. “Some territories are harder to deal with than others. Does your target market speak English?” McKeever asks. “What about labelling? You need to know if there are special conditions you have to follow.”

 

 

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