Business planning - export markets

Exporting can result in substantial benefits for businesses that are willing to exploit markets beyond the UK, says Neville Stein

Would you describe your business as a continually changing, exciting work in progress? One where new products, initiatives and markets are continually reviewed? One where opportunities, advice and information are actively sought?

How many of you would recognise that your business is already an international one, simply by virtue of the fact that you are already competing with international businesses, and that potential markets outside the UK do exist should you choose to exploit them in a measured and sensible way?

First let me say there is nothing wrong with trading only within the domestic market of the UK and keeping within your comfort zone of knowledge and experience. Small to medium-sized enterprises have been the backbone of the UK economy for generations, many without exporting a single thing. Perhaps you feel this is enough for you too. But things have changed.

To stay viable, businesses have to grow their sales and profits. Will you be able to gain more customers when there is already consolidation in the supply chain for ornamental plants, new entrants on the production side are rarely entering the sector and a real competitive threat is coming from importers? The reality is that political, financial and economic developments over the past 30 years have reduced barriers so much so that a global marketplace really is out there for everyone now. That means real competition in the UK from other international businesses. But the flip side of the coin is that we can compete in their domestic markets too. Are we doing so? If not, why?

According to Flowers & Plant Edition 2014, published by the International Association of Horticultural Producers, the export of British ornamental products has risen to EUR65.1m. Nursery stock exports were up from EUR4.2m in 2012 to EUR5.65m in 2013. Although greater exports are encouraging, it is still a staggeringly small amount considering the skills, excellence and size of our sector in the UK. So why so little? I think it is a combination of factors:

- We have not seen the need.

- We have not seen the market opportunities.

- We have not acquired the skills.

- We have not had the confidence.

The need to export

Let's look first at the "need", a particularly pertinent consideration for those companies whose sales in their home market are strong, and it is a valid question considering the costs, time, hassle and commitment required to develop exports. The benefits of exporting are substantial and not limited to just an obvious increase in foreign sales.

Working in international markets will give you greater awareness of other products and services, increase your standing among your peers, develop your skills and invariably improve your level of service - all of which could benefit your home market customers.

Exporting will also allow you to diversify your markets so that you are no longer dependent on one market for your success. In addition, trading in the home markets of your competitors will give you greater understanding of how they operate, enabling you to become more competitive with them back in your home territory.

So now we need to find the markets. Firstly, you need to know your business inside out - its strengths, weaknesses, aims, objectives and financial data - and then develop a market strategy that fits. If you want to be successful you need to take a strategic approach, not just dip in and out of a market when you have a surplus of stock that you cannot sell. You need to consider the long game and that involves identifying where the specific market opportunities are.

Do you have products that are unique? Maybe you have products that are of an exceptional quality or maybe you can provide the same products but much cheaper. The point is, do you have a unique selling proposition and does the target market value it? This need not to be a physical thing. Many successful exporters in our sector are selling intellectual property - licenses to grow new plant varieties.

New markets can be found by following established market development strategies, such as taking your existing products and selling them to the same types of customers but outside the UK, or a diversification strategy - developing new products and selling them to new types of customers. However, this strategy has to be supported by strong market research. In very simple terms you need to find out what customers want, to make sure you can produce or provide it, make the offer and then sell it to them. For both the domestic and international market, these principles will apply.

Skills and confidence

Finally, let's consider skills and confidence, two almost self-imposed barriers to exploiting business opportunities in the modern world, and two that are inextricably linked. We are incredibly fortunate to be in business at a time when the internet is so fast, available, cheap and efficient. It holds a staggering amount of data, opportunities and tools that are there to be used should we choose to do so.

Social media also allows contacts, business profiles and friendships to be formed across borders and cultures, and with English being the international language of businesses it could not really get much easier.

You need to allocate time and a budget to develop the specific skills of international business needed within your own company, and there are many resources. The Commercial Horticultural Association, which has long been championing exports, can provide assistance including fact-finding and help with exhibiting at international trade shows. Other trade organisations offer expert advice too.

I can highly recommend the Government's own free resources, such as its UK trade and investment export advisers ( uk-trade-and-investment-services-for-exporters). They also offer a 12-week online programme to explore the tools and skills required - Passport to Export Service and ExportSavvy. They can assist with loans, grants, specialist insurance and even attending trade shows abroad.

Exporting and exploring international markets can be complex and challenging. However, we really need to take steps to demystify this process and realise that with proper research, planning, and assessment of the costs, it is actually the easiest it has ever been - and potentially the most rewarding. So consider where your business wants and needs to be, and then take your place with confidence on the global business stage.

Neville Stein is managing director of business consultancy Ovation

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