By Toby Edwards, CEO of Shipa FreightTaking your products abroad is one of the best ways to grow and scale your company, but starting to export can be challenging for small businesses.
A recent study from Shipa Freight, called Ship for Success, found that although 71% of exporting SMEs are choosing to concentrate on overseas markets above their domestic market, many of these businesses also lack the necessary expertise in international shipping. This quick guide will help you get started.
Researching overseas marketsAs a first step, you need to decide where in the world you’re going to take your products. The UK’s Department for International Trade has an online export portal where British businesses can search for suitable opportunities in overseas markets and find out how to submit a proposal. The Enterprise Europe Network can also help you pinpoint possible markets and navigate regulations, and connect you with local partners.
Once you’ve identified a possible export market, you need to gather information about its rules and regulations, the political framework and legal system, the competitive landscape, and customer buying behaviour and habits. Good sources for online research include the World Bank’s country profiles and the UK government’s exporting country guides.
If you’re planning to travel to your destination market to conduct field research, the Department for International Trade can connect you with potential buyers and partners. You could also consider joining an international trade mission or visiting an international trade fair.
Securing export financeExport finance is a type of trade finance that can help you conduct international trade easily and securely. Products available include trade loans, export factoring, documentary collections, export letters of credit and guarantees. Do some research and speak to your bank about which of these options may work for your business.
If you struggle to secure export finance from your bank or other traditional lenders, you may be able to get help from the government. UK Export Finance (UKEF) is a British government department that works with private credit insurers and lenders to help UK companies access export finance. You may also be eligible for a government-backed Start Up loan.
Understanding export complianceAs well as keeping up-to-date with laws and regulations, compliance also relies on a good understanding of your product, customer and destination market.
Complying with customs rules means using the correct commodity code or tariff. Most countries use codes that comply with the Harmonised System (HS), which allocates a six-digit code to thousands of product types. Use the government’s trade tariff tool to find the right code for your products. Bear in mind that certain products are controlled, which means their movement is restricted and you need a special licence to export them.
Keep a complete record of each shipment with all the relevant paperwork and check the requirements of your export market’s custom authorities; you may need to provide things like certificates of origin and pre-shipment inspection documents.
Shipping your goodsThe cost of shipping your goods will depend on several factors, including the origin and destination, the weight and volume of your shipment, and the method of transport you choose (ocean or land freight tends to be much cheaper than air). There are also contextual factors that will impact the price, including the time of year.
However, it’s important to look for more than just the lowest price when you’re choosing a freight forwarder. Choose a reliable company with a good reputation and comprehensive global coverage, which can help you navigate compliance rules and get your products from A to B simply and swiftly.
If you’re planning your first overseas shipment, make use of all the government support available and explore the tech innovations and platforms that are helping SMEs reach new markets.