How to make exporting a success post-Brexit
Cutting through the uncertainty, pet food brand boss and successful exporter James Milbourne shares his tips to start selling overseas
James Milbourne, director of international pet food brand Canagan, is no stranger to exporting trials and tribulations. As a business that exports to over 35 countries, with over 5,000 pet stores across the world, Canagan is going from strength to strength.
Here, James (pictured below with father Eddie) shares his insight on what he’s learned when it comes to exporting business and advises on key factors to be aware of.
Besides the brief distraction the US election provided, national discourse is still very much centered around Brexit. Uncertainty continues to hang over the decisions of many business leaders, who worry about what its implications will be.
Yet while the effects that Brexit will have in the longer-term are unknown, there are still plenty of opportunities for international trade which businesses can take advantage of. Here are some steps businesses can take to stay on the front foot.
1. Take advantage of the weak pound
Since the referendum, the most direct impact that has been felt so far has been the devaluation of the pound, which has lost 20% of its trade-weighted value. The effects of this are far from universally positive; 2017 inflation forecasts have risen to 2.7%, companies have seen their input costs rise and higher commodity prices have increased the costs of living for consumers.
Such markets have understandably unnerved business leaders, enhanced by fears that domestic consumer spending may start to slow next year.
Yet the devaluation has given a much-needed boost to UK exports, as consumers overseas are finding that British goods have become far more affordable. This is a golden opportunity that businesses must look to take advantage of.
UK exports are expected to increase by 2% in 2017, and it is essential that companies start to take a global outlook to increase their profits. In particular, demand has been steadily increasing from emerging economies, and UK based companies are now in a fantastic position to get a real foot in the door of these markets.
However, businesses must be prepared to make investments to increase the production of exportable goods and services to fully exploit this opportunity.
2. Reduce risks
Another side effect of uncertainty is that companies may be dissuaded from further international exposure due to the extra layer of uncertainty that volatility in currency markets adds.
Businesses with these concerns should consider hedging against currency risks by trading in the future market. At Canagan, we always buys our foreign currencies one year ahead, which means that any exchange rate fluctuations can be planned for in advance, helping to reduce uncertainty.
Another issue that concerns business at present is the risk of a ‘hard Brexit’, which would see the UK leaving the European Single Market. If this were to happen, some goods sold to the European Union could be subjected to tariffs and their prices could increase by more than 10%.
Companies that would be particularly affected by this outcome may wish to consider creating plans to offshore parts of their business abroad in order de-risk the European market. There is still over two years for businesses to come up with a contingency plan, and while a ‘hard Brexit’ is perhaps the least likely option, being prepared for the worst case scenario is always good business.
3. Network, network, network
An essential part for any business trying to sell its products abroad is to network like there is no tomorrow. At Canagan, we started by attending trade shows abroad and getting to know prospective customers.
Being seen at many shows around the world helps to build confidence in your brand and convinces people that you are a serious player. Often it won’t be until the third or fourth time that you meet someone that you actually sign a deal. Going to one lone event is unlikely to be of much help – persistence is key!
Quite a lot of business is done in restaurants or bars, and this is what makes business so much more than just the product or service. Showing your fun side is a must, and it really helps to cement your business relationships with customers.
Creating international links has a snowball effect. To begin with, nobody is that interested in knowing you, but as your export business grows so too does interest. It is likely that your customers will start talking to other potential customers and the snowball effect begins.
For instance, our Scandinavian customer who has been distributing our products for four or five years is friends with our now French distributor. They were at a birthday party in Helsinki, spoke about Canagan, the next week we were introduced via email, two weeks later we visited and now our products are launching in 180 garden centres in France.
Finally, you must be prepared to travel to meet face-to-face with clients. Whether it is to resolve an issue, sell a new product or build a relationship, there is simply no substitute for a face-to-face meeting. The more committed you are to your clients, the more that they will respect you.
4. Respond fast, always
As the leader of a business, there is nothing more frustrating than waiting for a response to an urgent question. Regardless of the hour, we respond to all our international customers within hours of them emailing us 24/7.
If I wake up in the middle of the night and see that our Asian customers have emailed us I will always respond to them. This might seem like the last thing you want to do in your free time, but it allows your customers to act quicker and they will appreciate your commitment.
5. Be Flexible
Finally, be flexible! Don’t have set rules and procedures which must never be broken. Each customer is different and will have specific needs and preferences, which you must be sensitive to. If you are prepared to help a customer when they are finding things tough, then they will return the favour when you need help. If you are not prepared to be flexible, then don’t expect them to be.
Award winning natural pet products company Canagan has a mission to produce Britain’s ‘Finest Grain Free Dog and Cat Food’. Part of the Symply Group, the business now exports to four continents and more than 35 countries.