Exporting to foreign markets can be a profitable enterprise, but it can also be a tricky undertaking. We take a look at how you can provide the same quality of service to your customers overseas as you do in the UK.
Modern business operates within a global marketplace, and shows little sign of slowing down. The exchange of goods and services across international lines is seen as a vital step for many companies in increasing their longevity and expanding their client base.
Exporting to other EU countries, in particular, forms a vital part of the UK economy. Figures released in early 2014 by the Centre for Economic and Business Research show that exports to other EU member states are worth an estimated £211 billion to our economy. It is also important from an employment perspective, with exports to Europe help supporting a significant 4.2 million jobs within the UK. Of these 4.2 million jobs, 3.1 million are supported directly by exports to other EU countries.
EXPORTING CAN HELP ALL KINDS OF BUSINESSES
One of the biggest mistakes that a small business can make is to think that they are too small to benefit from expanding their operation into overseas markets. There are numerous benefits to exporting products, and there are a number of ways to export that will suit all types of company. But building a foreign market for your product or service is a big undertaking. It’s a task that takes time, money and effective strategy.
WHAT IS QUALITY?
According to the Chartered Quality Institute, quality is “an outcome – a characteristic of a product or service provided to a customer, and the hallmark of an organisation which has satisfied all of its stakeholders.” The quality of your product or service is what will encourage repeat business from your clients or customers. It is also, in essence, the elements of your product that have made it so successful thus far. In order to encourage overseas growth, that level of quality is going to need to stay consistent, which is not as easy as it sounds.
HOW DO YOU MEASURE QUALITY?
Quality, like anything else in business, is a target. As with any other metric, it needs a measurement system in order to achieve. A system to do just this should already be in place within your domestic organisation. “Delivering continuous quality starts at home,” says David Armstrong, Head of Profession for the Chartered Quality Institute. “Whether you are looking to export or increase sales in your home country, it is essential your business has a quality management system. This will enable you to identify clear and consistent success criteria, measures of success and KPIs [key performance indicators] regardless of geographical location for service and after-sales care.”
The type of measures and KPIs will vary from business to business, but developing a strong sense of what these are will help form a coherent quality strategy and develop a definite brand that will hopefully translate across European lines.
DELEGATION: CAN YOU AFFORD NOT TO BE AROUND?
One of the hallmarks of a quality international business is delegation. One of the inevitabilities of setting up abroad is that you cannot be in two places at once, and if your UK business cannot operate to a high standard for periods of time without your physical presence then it will be impossible to set up an international arm. Providing a quality service in your main business should be your number one priority, and if it will have an adverse effect on your domestic business then it isn’t worth doing.
Another issue to factor in is that while you may be able to move between the two operations, you are in all likelihood going to need to sacrifice a couple of your top executives from your home operation to work on expansion, and to train up new staff to company standard. Again, if losing these executives will damage the quality of your home operation, then you are simply not ready to expand. If this is the case, focus training your employees to a higher competence in preparation for future expansion. It will also ensure that your business remains solid if anything were to put you out of action.
PICKING YOUR EXPORT MARKETS
While it can be tempting to set your sites on the hot market that is garnering the most coverage in the Financial Times, you really need to pick the market that best suits your product and business style. David Armstrong believes that “the more commonality an export market has with our own – in terms of expectations of quality and service, regulation, legislation etc – then the more straightforward it will be to implement consistent success criteria, measures and KPIs.” Keeping quality high in a market that is similar to the UK is an easier undertaking than one where your company is having to navigate a complex corporate culture and unfamiliar business landscape.
Bone up on the business culture in the country you’ve identified, along with the rules and regulations for operating in that jurisdiction. Operating in a European country, especially one with membership of the EU, is much more straightforward than doing business elsewhere but don’t let that lull you into a false sense of security. There are still differences in legislation and regulations that need to be adhered to. Culturally the EU is not a homogenous unit, and you need to be aware of this to avoid alienating employees, your supply chain and your customer base. It is better to be overly cautious than to rush in and make costly mistakes.
COMMUNICATION IS KEY
David Armstrong believes that “the most common mistake businesses make when expanding is poor communication, which can often result in misunderstanding requirements, and poor after-sales support.” Quality after-sales support is one of the most important things to get right as a business, and is a key component in successful business endeavours, both at home and abroad.
Another thing to consider is language. Unless you’re looking to expand into the Irish market, you will probably be operating within a different language. Once you have identified your key quality measurements and policies, make sure that they are correctly translated for your workforce. This seems relatively straightforward, but good translation is more than just a literal changing of words. It also has to convey the meaning and intent, which can be culture specific. When it comes to delivering a quality service, it is important that your staff understand exactly what they are supposed to be delivering.
FINDING STRATEGIC PARTNERS
Expanding into a foreign market can be a daunting undertaking. If you are looking to do so, and maintain high quality standards, then one of the best options available to you is to link up with partners who are already operating within that jurisdiction.
There are many benefits to this strategy, the main one being that a local partner will be familiar with the domestic market, and can therefore offer a plethora of advice and tips. They can also help you when it comes to networking, and this can help your company to put down roots much faster. Again, the global nature of business means that this is easier to do than ever before. If you don’t already have business contacts in your identified country, then you can easily do so using online tools such as LinkedIn. Remember to exercise caution here, avoid partnerships that seem too good to be true and research the reputation of the business and key individuals, lest the association costs you credibility rather than gaining it.
Having strategic partners can lead to economies which is important, particularly during the initial phase. It may be possible to use some of their infrastructure and/or personnel. The infrastructure also helps you deliver a higher quality service than if you were supporting all this by yourself.
Teaming up with a local partner can also effectively be an endorsement, which may make introductions to other business partners happen much quicker. All of these things help your business look like a quality enterprise to your new consumer base.
ENSURING OPTIMUM STAFFING
Not all countries have the same emphasis on particular industries. Simply put, before investing in expansion into a developing market, it is important to check whether or not they have the type of skilled workers that you need in order to run your business successfully.
Obviously, not being able to hire people with essential skills will impact on the delivery of your product or service. There are ways around this, such as sending part of your existing workforce over to help establish the business and train up the staff with the types of skills that you need, either on a temporary or more permanent basis. This can be an expensive undertaking, however, as it needs to be incentivised for employees who may not wish to relocate and may leave a gap in your home operation.
Good employees that will really add value to your business may be hard to obtain, and you will be competing with established local businesses for that talent pool. While good employees are expensive enough, you may need to employ a local liaison: someone whose job is to help you navigate local customs, etiquette, and legalities.
Employing them on a consultancy basis may suffice, but an employee has a vested interest in your foreign arm taking root and therefore may work harder to help you establish your business. Also, developing your business is a long term project, and having someone on staff whose express job is to help you iron out these little problems is extremely attractive for many business people.
MANAGING STAFF REMOTELY
Managing staff remotely is a difficult undertaking and poses very specific kinds of challenges. When you work within the same building as your team and encounter them regularly, you can pick up on facial expressions and body language in order to try to work out whether or not there is a problem. When you’re managing a team remotely, your interaction is much more concentrated and, as they want to appear competent and in control of the situation, they are less likely to let you know that a problem is bad until it’s already escalated. Having open lines of communication is crucial, and asking specific questions about projects rather than general questions. Be in regular contact via the method of communication each employee prefers best. Regular visits are not just important from a logistical point of view, but it can also build morale and show the employees that they are an important part of the enterprise, not just the ‘second string’.
CAN I JUST DEVELOP MY ONLINE PRESENCE?
Depending on the type of business that you have, it may be possible to exploit overseas markets from your UK base. But this can be an expensive endeavour too as it involves an expanded web presence in a number of languages and, ideally, staff who are fluent in the main languages of the countries that you are targeting. While it is undoubtedly a much cheaper undertaking to do it this way, a lot of the points above still apply. You still need a member of staff or a partner organisation to help you navigate the tricky waters of doing business with a different consumer base. Also, just because this option means that you can technically be present at the main office and oversee all things, that doesn’t take away from the fact that you still may be stretched too thin from a time perspective, as may your key executives. Everything that you have in place for your after-sales team for your domestic market should be in place for each new territory, and that may mean a significant outlay in new staff initially.
Always remember that just because you are aiming to have a quality level that is on a par with the one that you have at home, doesn’t mean that it will be the exact same. Cultural differences may make that impossible. You can still achieve a similar quality level, however, and build a successful business on the international stage.