What are the benefits and barriers to export?

Research by Capital Economics for UK Export Finance (UKEF), the UK’s export credit agency, shows that companies with only domestic customers grow less than those that export abroad. They found that businesses with domestic focus grew at 8.4%, compared to 15.2% for those that export.

That’s why the Department for International Trade is hosting a series of training workshops as part of the Export Academy, to upskill your business by developing an export strategy to grow overseas.

The first session of the 10-part programme will focus on the benefits and barriers to export and will take place on 14th June. A full list of the sessions and the link to apply can be found here. 

What are the benefits of exporting?

If you spread your product or service across several markets this can mitigate the risks of decreased sales in one country having a significant impact on your business. Exporting to a range of countries can also expand the lifecycle of mature products. If the domestic market seems saturated for your goods or services, you can introduce them to other parts of the world.

Exporting to new markets also creates opportunities for staff as varied projects are developed as part of international business strategy. 

Increased interest from other markets can also increase sales and encourage innovation. An example of a company the Department for International Trade has supported is Tomcat Special Needs Innovation. The company has developed accessible trikes and has now created over 50 innovations. It wanted to globalise to help children across the world who do not have access to suitable exercise equipment. 

When it first started exporting to Belgium, it did not have mud guards on the bike or a basket and could not get insurance in that market because of this. By looking at new countries with the support of the Department for International Trade, (DIT) and Business West, this led them to create products suitable for specific overseas buyers. Its export sales increased by over 40% from 2019 – 2020. 

What are some of the barriers to export?

There are various tariff and non-tariff barriers to trade to consider. Tariff barriers include taxes on certain imports which could make your product or services less competitive in certain markets. Its therefore important to carry out market research to ascertain whether there is sufficient demand in your target market to justify export. 

Its also important to consider the need for the business to prepare for compliance and going through the correct customs procedures.

There are also financial barriers to consider such as whether your business can afford the short-term increase in costs that come with exporting and whether you have the resource within your team to deal with the impact developing an export strategy could have. Some of these costs could include travelling to target countries for trade shows and meetings and localising websites and marketing collateral to suit the respective market. 

Get prepared for export with the Export Academy 

Research from the Department for International Trade suggests that most businesses who could export feel that they don’t have a good level of knowledge about how to do so.

The Export Academy aims to address this uncertainty about how to sell internationally through education and support, giving businesses the tools and confidence to seek out new opportunities around the world.

If you think your business is ready to embark on an export journey, sign up to the Export Academy here.