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Bring down the barriers!

It’s time to face the fear and fight back with reality; the reality of international trade according to the businesses profiled in this book and people who responded to our Go Global survey held in July 2010.

Fears and realities

Fear: To trade successfully overseas, I first have to trade in my own market for years.

Reality: 28% of the companies surveyed and profiled started selling overseas within 12 months of trading and for 36% it was between one and two years. The companies were discovered via search engines or recommendation, promoted via local blogs and sites, and orders have grown ever since via word of mouth. For the majority of businesses (64%), this happened before their venture turned two years old.

Fear: It will cost me a lot of money to become a global business.

Reality: None of the companies profiled spent a penny, dime or yen on purposefully attracting their first overseas order. With business coming in from overseas customers, they are now investing in having sites translated or making customer visits, but even this can be done on a budget. These companies are all making the most of free or low-cost technology tools and social media to increase orders and customer satisfaction.

Fear: I can’t make sales or service customers if I don’t have an office overseas.

Reality: Of the businesses surveyed, 62% sell overseas via their own website and 25% sell via other commercial sites such as eBay, Alibaba and Etsy. When you have a presence on the web, you rarely need a physical presence in the country.

Fear: I will need to employ lots of people to help take my business to the world.

Reality: Of the 20 businesses profiled, 35% of them have one employee (the owner) and only 10% have more than 10 employees. Rather than employing staff, they are outsourcing and subcontracting the work, everything from manufacturing to identifying agents, and finding talent on sites such as Elance, oDesk and LinkedIn.com, from which they can effectively form international project teams. The way to grow, say our profiled businesses, is to focus on the bit you do best and outsource the rest.

Fear: I won’t be able to understand export documentation.

Reality: A significant 85% of survey respondents send their products overseas via the local Post Office and 11% use international courier companies, with the remainder making the most of local shipping arrangements. It is from these experts that you will learn all you need to know about documentation and customs procedures.

Fear: I will have to speak the language of the countries to which I’m selling.

Reality: It’s a nice touch to learn a few phrases and have parts of your site translated, but until you reach that point, take advice from our profiled success stories, and let Google Translate become your new best friend!

Fear: I won’t get paid.

Reality: Of the businesses surveyed, 65% use an online payment gateway such as PayPal to ensure payment is as easy and secure as possible for the customer, regardless of their country or currency. Having these systems in place increases efficiency and reduces the risk of customers holding back on payment.

Fear: I won’t convert one international sale into lots more sales.

Reality: Many of the profiled businesses speak of ‘accidentally’ getting into global trade by virtue of receiving international orders via their website or network. The experience of delivering that first order brings with it confidence in your abilities to service new markets and an appetite for more orders. This explains why 78% of survey respondents believe their international sales will increase over the next 12 months.

Fear: I just don’t know where to start.

Reality: Start right here!

How government can help

In researching Go Global, I have spoken to many businesses and delved deep into the topic. Based on this I believe there are a number of actions government can take to bring down the barriers to international trade and increase support for small business. Some are macro, others more micro. In brief, they are:

1 Review the criteria for key trade programmes such as Passport to Export and the Export Marketing Research Scheme. Current criteria state that companies must have been trading for more than three years and have over five employees. This would make all the companies profiled in this book ineligible, yet if they received support they may be better placed to boost international orders.

2 Explore new export indicators; a way to count and measure export volumes that better reflects the contribution being made by small businesses selling services and goods via their own and other commercial sites. In China, Alibaba.com provides quarterly reports to the Chinese Government; could the Office for National Statistics source similar stats from the likes of eBay, Alibaba and Etsy? These sites represent powerful barometers of international trade activity.

3 Announcements stating an increased role for the Foreign & Commonwealth Office in trade promotion are welcome. With officers in post often for many years, these well-connected agents on the ground will undoubtedly be an invaluable resource for the small business entering a new and unknown market. Taking this on a stage, could the FCO develop a Go Global app connecting small businesses to local embassies, as well as providing a local news feed/travel information/political updates, etc?

4 4. Work closer with private sector providers such as the partners on this project who provide valuable services and support to exporting businesses. Both government and corporates have the same objective in mind; encouraging more small businesses to grow through increased international sales. There is indeed scope for joint work.

5 5. Promote initiatives like this book! Small businesses need encouragement and assistance to take the first step in exporting.

I accept government budgets are not what they once were. These recommendations are made with this in mind. None of them require significant outlay or expense but they will deliver a return on investment in more companies exporting and making the 1.2 billion unreached customers part of their core market.

The single and simple aim of this book is to encourage and assist anyone who is starting and growing a small business to consider overseas sales. Government is in a strong position to do the same.