What to consider
When planning to export, it's important to research the markets you want to trade in. This will help you to weigh up the opportunities and risks.
It's usually best to start with one market. You can test out your research and planning, and get comfortable with that market, before exploring another.
You may also find it useful to write a research brief to keep you focused.
Primary and secondary research
There are 2 types of research you can conduct:
- primary research – first-hand evidence gathering in your chosen market
- secondary research – published research and data
Despite the name, you should start with secondary research. This will help you quickly build a picture of the market, and what options to investigate in more depth with your primary research.
Secondary research can tell you:
- demographics, for instance population size
- how well a specific economy is doing
- where the biggest markets are for your product or service
- which markets are the fastest growing
- market trends and fluctuations
- currency rates and fluctuations
Currency rates and fluctuations
It's important to understand currency fluctuations. Deals can take several months to negotiate, so calculations based on current market value could be different when you come to finalise your transaction.
If you trade in another currency but you calculate your costs in sterling, a poor exchange rate could reduce your profit margin or even leave you without a profit margin.
If possible, agree currency rates at the point of negotiation so you don't get caught out.