SME Exporters Share Hard-Learned Lessons in Panel Discussion
26 July 2024
“Going Global” was the subject of last-week’s lunchtime Bitesize Boardroom event, hosted by James Mason, CEO of West and North Yorkshire Chamber of Commerce.
Joining him on the panel, answering questions from online participants from around the world were: the founder of Adams FoodService, Dr Amjad Pervez; managing director of Sound Leisure, Chris Black; international director at Chamber International, Nikki Clow; and DBT international trade advisor Lydia Moi.
The Chamber’s Bitesize Boardroom discussions have a reputation for honest discussion and candid revelations from experienced business leaders. The Going Global event lived up to this expectation, especially when participants responded to the question “what do you wish you had done differently when first importing and exporting?”
Don’t forget due diligence
Dr Pervez, whose company has grown to become one of the UK’s largest cash-and-carry food retail chains, said that early in his career, when Adams FoodService (formerly Seafresh) first looked at importing food, he was so excited about the possibilities that he overlooked some important protocols, and this almost led to disaster for the business.
Recounting how, after placing a large seafood order with a new supplier in Karachi, he attended an evening training course in Huddersfield about importing, Dr Pervez confessed: “I heard the trainer mention the words due diligence, and suddenly had a cold sweat”. Had he really taken the necessary precautions for this order, and done the paperwork right?
“Luckily my supplier had already thought of this, and done what was needed – if they hadn’t, it would have been £150 thousand down the drain.” Summing up, he said, “The lesson I learned was - don’t be in a hurry, do your due diligence. Go to the professionals, people like Chamber International. Mitigate your risks”.
James Mason agreed: “We’ve all done things wrong. You might get lucky, but the chances are it will catch up with you”.
Speaking of his own experience, before working for the Chamber, when his company sold and delivered a staircase to a customer in northern France by van, James said, “The money went through the bank, so it was accounted for, but we did minimal paperwork. After, we said, why stop at one? Let’s do a hundred in the year, but let’s do it properly. It cost us, but this paid back in time, because we became the first exporter of our product, putting us a long way ahead of our competitors”.
Do your research
Chris Black, whose company Sound Leisure is now one of the world’s most successful creators of jukeboxes, with exports accounting for more than 65% of revenues, said that one thing he had learned was: “Find a good freight forwarder”.
“They take so much pressure away from your own team; it’s like having another member of staff – they know what to do.”
Another vital lesson, he said, when deciding which international markets to address, is: “Do your research”.
“After Brexit, we looked for new markets. I thought India would be easy, because our products are bright, colourful and musical; and we thought China would be a nightmare, because we didn’t speak the language. But later, when we were already sending containers of the product to China, we still hadn’t broken India.” After taking this conundrum to a team at Leeds University, research revealed that Sound Leisure’s retro-mechanical product range was not attractive to India’s future-oriented consumers, which saw it as “old-fashioned”. As a result, the company developed a new digital jukebox specifically to meet the preferences of the Indian market.
The importance of travel
Dr Pervez stressed the value of meeting in person, especially at trade exhibitions. “Fraud in online trading is prevalent right now, so we stick to the old methods – we still go to exhibitions. Local, national, Europe, Middle East – it depends what you want to do. You need to invest in travelling. These companies at the exhibitions have paid the expenses; there are clearances they have to go through; and you won’t just meet one – you’ll meet many.”
Chris Black agreed with this assessment. “The biggest thing is getting on the plane. Go to the shows. You need that eye-to-eye contact, and to see their premises, to know whether they can actually deliver what they say they can”.
James Mason recommended that businesses should do more than just travel abroad for meetings, and instead build extra time into their itineraries. “See the sights, make friends, and get to appreciate the culture”, he said. “Never underestimate the power of going and learning. The business will follow if your product is good, and your pitch is good.”
Help for “accidental exporters”
Nikki Clow, who has supported traders through her work Chamber International for more than twenty years, addressed the phenomenon of “accidental exporters”, citing the example of a company that unexpectedly won a £0.5million tender to refit a school in Brunei. “They phoned us and said: Help – we didn’t really expect to win this! We’ve never exported past the Channel Islands before”.
She recalled the first question she asked them was: “How will you get paid?” The Chamber helped them to see that the payment was as much a risk for the buyer as the seller, and enabled them to de-risk the payment process through the use of a letter of credit arrangement.
Exchange rate fluctuations, and the question of who is responsible for shipping and insurance, are all issues where risk needs to be understood, managed, and minimised. “You might not know what you need to think about. You don’t know what you don’t know”, she said. “Your goods could get stuck in UAE customs because of just missing document that you didn’t know you needed. Talk to people who do know”.
Read how Chamber International’s letter of credit service massively reduced payment risk for UK exporter Sessions UK.
Contact Chamber International today for expert assistance on origin, methods of payment, customs clearance, export controls and more. We help you get it right first time, and maximise your profits when trading internationally.
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