Launched in 2012, family run pet food brand Canagan exports its products to more than 35 countries in European, Asian and Middle Eastern markets with a turnover of over￡21.5 million this year and just 20 members of staff. CEO Eddie Milbourne offers his advice to other business owners on ‘what to expect when you’re exporting’.
Scaling up your business to export can be a daunting task. Many companies shy away from the potential rewards because they fear the elevated risk. This is understandable from a business perspective. Current estimates suggest that only one in five of all small businesses in the UK export abroad, a number that has been stagnant for quite some time.
As with most forms of scaling up, exporting can feel like venturing into the great unknown. Yet entering new markets is a great way to access new customers and can be done without drastically changing the way you operate. As the latest FSB report has highlighted, small firms that export are more likely to survive, grow and innovate.
With exports playing such a major role in the UK’s economy, it’s no wonder they are forming a big part of the government’s plan for growth. They have set a target of doubling the value of UK exports to £1 trillion by 2020 and having 100,000 more UK companies exporting.
The good news is there’s rarely been a better time to be an exporting company. With overseas customers taking advantage of cheaper British products because of a favourable exchange rate, international trade is driving business growth in the UK. As well as this, the digital revolution now means that smaller enterprises can compete with the biggest listed companies anywhere in the world.
Venturing into these new markets is a great way to scale your business. If you’re considering exporting, there are a few things you should consider.
Do your research
To effectively assess the risks involved, you need to know everything you can about the market you are going to export to.
Researching other companies in the region can be a great way to estimate what results you can expect. Speaking to people who already work in that market will also be invaluable.
It’s not always a bad sign if there aren’t similar companies to your own though. We’ve learned from our time in America that it can be difficult to trade in markets that have become saturated with countless similar products. In emerging markets, particularly in Asia, our product is more unique and has been far more popular than we could have expected. ‘Made in the UK’ can be a fantastic stamp to have on your product if you target the right areas.
You can’t go at it alone
Whether it be your staff, retailers or suppliers, sourcing international business partners is essential and arguably the biggest challenge when it comes to exporting.
Even if you have a good product, you will need to have a reliable international team that can assist you in tackling the market and offer the inside knowledge necessary to succeed.
If you have them in your sector, international trade shows are a great way to meet likeminded business people from different parts of the world.
The more trade shows you are seen at, the more seriously people begin to take you and your product. We found that often it is not until the third or fourth meeting that you will begin to strike a deal but by buying into these already existing and successful networks, you can save yourself some time and some of the risk.
It can take time.
Exporting to new destinations, particularly ones outside the EU can be a straining process. Each country or region will have a new set of rules and regulations for you to contend with so it’s important to seek us much advice and help as possible. Make sure you are aware of the duties and customs that could apply to your product.
It has taken us nearly two years to register Canagan in China, but we know it will be worth the wait because the market place there is colossal. Similarly, we’ve only recently sent our second container to Thailand after nine months of paperwork. Hiring someone to focus on the process can be very helpful as well as leaning on your existing distributors or suppliers.
A bit of patience when dealing with foreign customs can mean big rewards, but be prepared for long waits and make sure your business is prepared for the potential delays.
The benefits of exporting don’t just have to be financial. What often isn’t discussed are the softer more intangible benefits like an improved company reputation and the new business and cultural experiences.
Visiting new countries and meeting new people can bring benefits to you both home and away. We’ve decided to make travel a big part of our business at Canagan because we believe it’s worthwhile to meet face-to-face with our customers and clients to help maintain our positive relationships.
This has been great for business but also allowed us to experience many new countries and cultures that we hadn’t seen before. We’re always flexible and open-minded when it comes to business with new cultures and customs but also try and have some fun along the way.