With the current price of the pound making Scottish products and services even more attractive overseas, now is a good time for firms to consider exporting to generate long-term growth. So what can businesses looking to export for the first time do to start the process?
Select a target market and create a clear business plan
The prospect of searching for opportunities abroad can be challenging. The ability to access support and advice from partners such as the UK Trade & Investment (UKTI) overseas market introduction service can therefore be crucial.
A thorough business plan will also help set out how a firm plans to grow at a manageable rate. This can help minimise the risk of over-trading, which can leave a business with insufficient working capital to meet day-to-day costs.
Exporting can be as simple or as complex as a business wishes to make it, but the correct implementation of a working capital strategy is one of the most effective ways to support export ambitions.
Be protected and aware of all finance options
Making sure terms and conditions on contracts are clear, that lead and payment times are adhered to, and that good accounting processes are in place are all essential to make sure that transactions go ahead as planned.
Traditional trade products, like letters of credit and guarantees, offer alternatives for managing the risks of trading internationally. Likewise, taking out insurance to cover you if a customer (or supplier) fails to pay or enters administration are other ways to help keep your business protected.
Solutions such as invoice finance, export finance and trade finance support the business as they enter trade agreements and can help ease pressure on cashflow. They can also be used as powerful bargaining chips in commercial negotiations, helping you to secure more favourable payment terms with buyers and suppliers.
There will always be challenges along the way, but that is not an argument to delay plans indefinitely. Having a trusted adviser that can provide tailored advice to help your business aims, will help ease your first steps into international trade.
As part of Lloyds Bank’s work to help British businesses prosper at home and globally, we have developed a partnership with UKTI to support the UK’s export ambitions. We have pledged to support 5,000 first-time exporters every year until 2020.
In addition to the advice of lenders, exporters should also seek the guidance of organisations such as Scottish Enterprise and UKTI who will be able to provide tailored support to any Scottish businesses developing an export strategy.
• Colin Walls is head of global transaction banking at Bank of Scotland