Evaluate opportunities and create an export plan

Moving from accidental to strategic exporting

View transcript for Episode 4 - Move from accidental exporting to strategic exporting recording
The difference between accidental and strategic exporting comes down to proactivity. If a foreign buyer emails you and shows an interest in your product or service, it may be enough to encourage you to export there. This is accidental exporting. It was never in your business plan. You simply reacted to the opportunity.

Having an export strategy on the other hand, is when you proactively aim to expand your business internationally. You need to plan the steps to achieve this.

There could be many reasons for choosing to export. Your UK operations could have reached maximum growth. Or you have a seasonal product, such as swimwear, and operating in a country that has a different climate from the UK could help smooth over seasonal highs and lows.

Benefits of strategic exporting include spreading the risk from economic downturns and competition in the UK. But entering a foreign market comes with added financial and legal risk. So it’s important to do your research.

Be honest with yourself. Do you have the people, money and time to expand?

A common mistake is not being strategic when it comes to market selection. For example, lots of people want to export to the US, because it’s a large market where many people have a large disposable income. However it also has high levels of competition.

Wherever you export, make sure you're making the right strategic choice. Creating an export plan will help you understand the risks and benefits.

What you’ll learn

  • the difference between accidental and strategic exporting
  • some of the reasons for wanting to expand into a new market
  • 3 things you should ask yourself before starting your initial research

Accidental exporting

You're an accidental exporter if you've already exported your goods or services to a new market by reacting to individual enquiries, rather than proactively trying to sell into that market.

A foreign buyer may have contacted you via your website or discovered you through social media. A typical email might be from someone who represents the sector your product falls under in the foreign company. They're interested in your product, want to find out more information and would like to see a price list.

You may end up with an order you can fulfil, but it was not part of your business plan.

Strategic exporting

Strategic exporting is proactively trying to expand your business internationally. It could be for a number of reasons:

  • It may have always been part of future ambitions for your business
  • Your business may be doing very well in the UK. You’d like to expand your revenue at home, but there isn’t much room for growth
  • Your product may be seasonal. For example, if you sell most of your swimsuits to UK customers in the summer, you could sell to another market abroad when it's colder in the UK but warmer there

Understanding the benefits and risks

Being active in a different market can help spread the risk from economic downturns and competitors in the UK. But remember – entering a new market will come with added financial and legal risks, so you'll need a well-planned strategy.

The legal environment in the country you’re exporting to can be very different to the UK. You’ll need to get access to the right expertise and make sure proper agreements are in place.

You may need to invest in extra resources to cope with increased orders and carry out marketing and administration.

You may also need to protect your intellectual property by registering your brand. This can be an added cost, but is needed to protect yourself and can also improve how people see your business and its products or services.

A common mistake is not being strategic with the markets you choose. Everyone wants to export to the US. It's a big market with disposable income, and they think they will do very well there. However, it can be a very tough market to enter, with a lot of competition.

International trade adviser

The importance of planning

Before you decide to make the shift to exporting, you should be honest with yourself – do you have the people, money and time to expand?

That's where making an export plan will help. You can do your research on your target market, its culture and any competition you may face, before working out which route to market you should take. That will inform whether you choose to work with a distributor, a team of agents, or hire your own sales team.

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