Business Owner

What's stopping small businesses from exporting?


Don't let complex regulations around exporting hinder your company from expanding into new markets.

This article first appeared in the Guardian

"We all suffer from fear of the unknown, so my advice to new exporters is to educate yourself until the issue facing you is no longer unknown," says Stephen Fear.

Amid a climate of strengthening business growth and economic prosperity, budding exporters should be feeling more confident than ever about sending their goods and services overseas.

According to the British Chambers of Commerce (BCC) almost one in five service sector firms is currently on the verge of exporting.

So what's holding them back? For almost one-third (32 percent) of those exporting for the first time, excessive overseas regulation was seen as the biggest barrier, the BCC figures showed.

In another survey, 25 percent of small or medium-sized enterprises (SMEs) fear external regulations will hinder international expansion, followed by a lack of contacts (17 percent), resources (16 percent), knowledge (15 percent) and talent (15 percent).

The complex regulations around tax, VAT and compliance that surround the export process can seem onerous to SMEs, especially those trading overseas for the first time. The situation is compounded by the fact that the rules around exporting vary from one market to another.

Get help: it's often free

But with help and support available from a variety of sources, there is no reason for SMEs to allow red tape to tie up their export plans.

Often it is simply the fear of the unknown; foreign markets, unfamiliar languages, cultural nuances and confusing local laws that must be observed. 

A solution for many exporters is to engage the services of a third-party provider that has the specific expertise and knowledge of the destination market as well as established relationships with delivery partners in those territories.

Many of the largest logistics service providers include useful information on their websites. For example, UPS explains how to estimate the landed cost of a shipment and clarifies country-specific regulations. As a customs broker UPS can also help facilitate moving goods across borders. Some companies have found that investing in staff training can also help with complexities of international export regulation.

Headquartered in Derby, U.K., digital communications firm Simoco Group also operates in the United States, Southeast Asia, the Middle East and Australia. Regulations vary among countries, so it's important to understand local legislation and stay on top of any changes, says CEO Mike Norfield.

"Obtaining export licenses can be time consuming and complex as the regulations are different for each country, so it is important to have well trained and experienced staff," Norfield says. "Exporters, whether new or not, should invest in specialist training and regular refresher courses for their staff."

The company also calls on the services of their local chambers of commerce, which they find particularly helpful as they can and do pass on the shared experiences of other member companies.

Remove the barriers

Exporters can never have too many good contacts. Stephen Fear, the British Library's entrepreneur in residence, advises new exporters to "network, network, network."

He advocates searching online for good quality export forums. Government sites offer a huge amount of largely free advice to exporters.

Finally, SMEs need to overcome the psychological barriers to exporting, which can often be the result of listening to the negative experiences of other exporters.

There are horror stories about shipping goods to some of the more challenging overseas markets in the Far East, but SMEs with export plans of their own should not be deterred by another business owner's bad experience. 

By seeking out the advice that is available from the relevant bodies, finding an experienced delivery partner and finding out as much as they can about their chosen markets, many of the barriers to exporting will be removed. 

Fear adds: "We all suffer from fear of the unknown, so my advice to new exporters is to educate yourself until the issue facing you is no longer unknown. Become knowledgeable about the subject of exporting, either by going on courses yourself or designating a couple of members of your team to go. Only after acquiring knowledge are you ready to take on the world."


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