As the government’s export credit agency, UK Export Finance works in partnership with exporters and banks to share the risks of providing export finance. Ahead of the HSBC Scottish Export Awards later this month, Carol Harvey and Carlos Guallart, export finance advisors for Scotland, provided their top four tips for Scottish businesses looking to start exporting.
There is a world of opportunity out there for Scottish business. Search online for Exporting is GREAT and you will see the demand that is out there.
Finding more customers outside the UK is the key to growth for many Scottish firms as they look to take advantage of a global market place. However, often these companies need additional help to get started.
UKEF provided their top four tips for any Scottish company looking to start exporting:
1) Think big.
There is a world of opportunity out there for Scottish business. By the end of 2014, some 11,100 Scottish businesses were selling their goods and services overseas, an increase of 17% over a period of three years. And when you look at all that Scotland has to offer, it is no surprise that there is global demand for our goods and services.
Right now, on the Exporting is GREAT website, there are hundreds of live opportunities across sectors. So whether your business manufactures components for the oil and gas sector in Aberdeen, or you are looking to grow your tech company in Glasgow by selling overseas, you will find that the demand is out there.
2) Get the right advice on the market you’re entering.
It is undeniable that the benefits of selling overseas can be huge. Companies that export are 11% more likely to stay in business. They can achieve levels of growth not possible domestically, spread business risk, increase revenues and profits, and extend the commercial lifespan of their products and services.
However, you can only reap these benefits if you know what you’re doing in the market you enter. Obviously you’ll want to do your own market research, and desk research is a useful start. Added to this, support is available from the UK and Scottish governments. Scottish exporters have advice on their doorstep from Scottish Development International and access to UK Trade & Investment’s network in over 100 countries.
UK Export Finance Advisers like us are based across the UK including three of us in Scotland. Some exporters may not realise UKEF can provide advice and information alongside our own financial and insurance products. Across all our work, we are focused on helping companies make the right choices and helping to make exports happen. And again the Exporting is GREAT website can point you towards financial advice to make sure you’re fully informed when you seize the opportunities that present themselves.
Finally, investigate the route to market, be it direct sales or working with the right local partners. Reliable agents and distributors can help you benefit from their expertise and contacts.
3) Manage the risks.
You might find that you need the security of additional insurance as you begin to sell overseas. There are several export-tailored products available from insurance providers, and the right product will depend on the size, length and the country risk of the contract.
However, in some cases the private sector may not be able to provide insurance, and this is where UK Export Finance (UKEF), the UK’s export credit agency, comes in. UKEF exists to ensure that no viable export should fail for want of finance and insurance. For instance, our export insurance policy protects exporters against non-payment and political risk allowing UK firms to trade with confidence in new overseas markets.
4) Protect your working capital.
Before agreeing to an export contract, you will need to make sure that you have enough working capital to support the contract cycle, and that your cash flow is protected.
UKEF can help here as well. Through our Export Working Capital and Bond Support Schemes we are able to provide guarantees to your bank in circumstances where they are not in a position to support your requirements. These facilities are there to assist small- and medium-sized businesses to sell overseas. This support will reduce any security requirement your bank may otherwise have required and releases vital working capital back into the business enabling you to take on and fulfil more contracts abroad.
These are just few of the considerations that any business looking to sell abroad needs to bear in mind, but without doubt the most important thing is to seek advice. If you would like free, impartial and tailored guidance, whatever stage you’re at in your exporting journey, you can get in touch with UKEF by visiting http://www.greatbusiness.gov.uk/ukef.
Exporting and international trade remain high on the Scottish Government’s economic growth agenda and the HSBC Scottish Export Awards are about recognising the excellence in those emerging, wealth creating companies that are selling their products, services and expertise in scores of overseas markets.