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Exporting advice for small business

80% of small businesses in the UK shy away from trading overseas due to concerns over size, competitiveness and language barriers*. But importing and exporting offers businesses of all sizes opportunities to grow and discover new markets. Read on to find out the benefits to your business, plus how to get started.

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Benefits of exporting

Exporting can offer small businesses big growth opportunities. Importing can allow a business to expand its range of products or services, improve or repair its supply chain or increase customer satisfaction.

Exporting can dramatically increase turnover and profitability, particularly if there is no equivalent in the target market. A 2012 report from Barclays indicated that businesses generate an average growth of 30% after exporting for just two years. But many small businesses don't know where to begin.

However, international trade is not always easy, as it requires understanding of overseas regulations, logistics, ownership and variations in currency rates which impact on the amount paid. Therefore it pays to do your research first and make use of the advice and resources available.

Which markets to target

Europe is the dominant market for UK exports (ONS, 2013), and many businesses see this as less risky. Places such as Ireland and the Nordic countries make good starter markets for small UK firms.

More developing markets that SMEs could target include the ‘BRICs' (Brazil, Russia, India and China). Taken together, they represent more than one-third of the world's total population, and nearly one-fifth of total economic output, and yet only around 5% of British exports currently end up in these countries.

But while larger businesses and those looking for long-term growth should not ignore these markets, UKTI suggests that they can be hazardous for first-time exporters.

There is also great potential for UK exporters in markets as different as South America and the Middle East. But for many small firms, ‘doing exporting right' will continue to mean targeting safer developed countries, such as those in the Eurozone.

Experts agree that, for small firms entering new markets – especially those embarking on exporting for the first time – it is vital to get the basics right first.

Potential pitfalls

There are a whole a host of issues for potential exporters to consider; from customer credit-checking and currency risks to insurances and intellectual property protection.

Another obstacle that can put small businesses off exporting is the need to overcome language barriers. Intermediaries and translation services can be used to help with these issues.

Sources of export help

There are two main organisations that support UK firms in trading internationally:

UK Trade & Investment (UKTI)

UKTI has 1,000 trade officers in almost 100 markets overseas, who can identify business opportunities around the world. They also have 40 offices throughout the UK delivering a wide range of services locally to exporters, including the following.

Finance for exporting

If the cost of getting started in exporting is putting you off, sources of financial help are available from UKTI’s Export Finance arm, which supports finance for export purposes that is not covered by the standard Enterprise Finance Guarantee (EFG) scheme.

Funding initiatives include:

  • Export Enterprise Finance Guarantee (ExEFG)
  • Bond Support Scheme
  • Short-term Credit Insurance Policy
  • Grants for first time exporters.

Find out more about export finance.

Tradeshow Access Programme (TAP)

There is also money available for SMEs to attend trade shows overseas through the Tradeshow Access Programme. Firms can get grants ranging from £1,000 to £1,800 to attend six trade shows overseas. Support may also be available for travel on overseas trade missions.

Find out more about the Tradeshow Access Programme.

Market research

UKTI can provide free advice on carrying out your own research, or substantial discounts can be offered on UKTI's tailored market research. The Overseas Market Introduction Service (OMIS), provides targeted market research to help businesses find those crucial first contacts overseas and to help them develop relationships in new, fast-growing markets.

Over half of UKTI customers go on to win additional sales of £600,000 within two years when they use OMIS (UKTI, 2013).

Advice

Through their regional offices, UKTI can give advice on whether your firm is ready to export, help you put together an export plan, advise on grants for trade missions and set up meetings. Many of the UKTI's services are free, though some may incur a charge.

For more information, visit www.ukti.gov.uk/export and find your nearest regional office.

Institute of Export

The Institute of Export is the professional membership body representing and supporting the interests of everyone involved in importing, exporting and international trade. It provides courses on the basics of importing and exporting as well as more specialist courses. Their training is provided through distance learning, day courses and links with colleges. For more information, visit www.export.org.uk.

For further help and advice, members of the Forum can call our helpline on 0845 130 1722.

* Regus, 2013

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