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The 5 hows of exporting

  • 3 minutes
  • Article

Taking your business to different markets around the world can bring real benefits to your business but it’s not always a simple process. So how do you go about it?

How to get started

Planning your export strategy is about thorough research, understanding the practical implications and setting clear objectives.

How to strategise

Once you’ve done your research, you’re ready to build a successful export strategy.

Be clear about why you want to export to help make your strategy specific. You may want to:

  • Boost turnover and profits
  • Keep growing from a strong position in your domestic market
  • Meet the needs of customers who expect you to operate internationally

Identify key risks:

  • Assess how you’ll meet the challenge of operating in a different language and culture
  • Plan for how foreign payments will impact on your cashflow
  • Investigate rules and tariffs for your target markets, getting local assistance and expertise where possible

Focus on key objectives:

  • Choose the markets that offer the most scope for growth
  • Establish your export budget and set goals for sales, turnover and profitability

How to handle your finances

From the funds you need for your expansion to handling currency exchange risk, there’s a lot to think about when you start exporting.

Securing payments

  • When you’re just starting to export, trading on open account, sending an invoice and getting paid in 30 days, is a simple way to start as long as your customer is willing and able to pay.
  • As your export volumes increase, the risk of non-payment grows. Trade finance tools such as bills (documentary collections) and letters of credit can provide you with greater control.

Managing currency volatility

  • Accepting and paying in foreign currency can make your business more profitable and attractive to overseas customers but it can bring risk.
  • You can mitigate this risk by setting up a forward contract with your bank - a contract to buy or sell currencies at an agreed exchange rate on a particular date in the future.

How to build your model - and adjust it

  • You can sell direct, use a distributor, use an agent or enter a joint venture – just remember to evolve your strategy as your business grows.
  • Make sure you have clear agreements with partners and get legal advice on key issues.
  • Consider your whole trade cycle and speak with HSBC or an accountant or tax advisor to help you review your options.
  • Think about sustainability – being part of a sustainable trade cycle not only improves your ESG credentials, but can provide greater business resilience as well.

How to get help

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