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Microsoft offers top tips to help small businesses handle the technical and financial implications of overseas trading. As exports from the UK are worth nearly £268bn per year, the opportunities for small firms to increase revenue through overseas trade are vast. Although exporting goods does pose some operational challenges, the financial rewards can be considerable. As a manufacturer of pipework components, Graphskill is a small business that has flourished since it started to export its products in 2002. Employing 12 and based in Cumbria, Graphskills looked to Germany as its first target market. "To be a successful exporter, it is worth developing your website. We revamped ours and it's made a huge difference. Potential overseas customers often want to check out a company before even talking to an agent so your website becomes an essential shop window," explains Martin Statter, managing director of Graphskill. "But with the benefit of hindsight, developing our exporting capability took more time and was more costly than we'd anticipated - so you need to ensure you have adequate technical, financial and human resources." Graphskill now successfully exports to Germany, Greece, Holland and the USA. While exporting can extend markets, boost turnover and help small businesses to avoid too much of a dependency on UK-based customers, it is also a big step for any firm. "Exporting tends to be more demanding, financially, than selling in the UK. Consignments are usually larger, lead times are longer and the risks are more difficult to control. However proper planning and thorough preparation will contribute to a successful exporting experience," comments Clare Barclay, head of small business for Microsoft. She continues: "Before starting to export, you need to have sound knowledge of target markets. Consider if your product is right for those markets and that you have sufficient resources to fulfil any new orders. A well-designed website and back-end system that can securely process orders will also be vital. Investing in a suitable technical infrastructure to facilitate exporting can deliver significant return on investment." Microsoft has produced the following top five tips to help small businesses handle the financial challenges posed by exporting: Consult the experts for their advice - The delay between shipping goods and receipt of payment can effect cashflow so before embarking on any overseas trading initiative, consult your accountant for his/her advice. Other good sources of information about exporting are your local Chambers of Commerce and Regional Development Authority. Your website as a shop window to the world - An easy to use website that can securely process orders as well as act as an online catalogue will be a sound investment and does not need to be overly expensive. Consult your IT partner for advice on the options open to your business. Ensure your price includes all additional costs - Exporting carries a number of additional costs that you must recoup. For example, transportation costs may include the cost of special packaging and labelling whilst documentation may also involve special costs, beyond just issuing an invoice. In advance of concluding the deal, also agree the 'terms of delivery' including the division of responsibility for costs and the risk of loss or damage in transit. Consider various methods of payment according to the customer - The payment method you use can have a significant effect on the level of risk you are exposed to. For example, documentary credits (or 'letters of credit') are the most secure method of payment other than payment in advance. If targeting consumers, consider the services of companies like SECPay or PayPal that offer solutions for the secure real time processing of credit and debit card transactions. Be prepared to quote and invoice your overseas customers in their local currency, rather than pounds sterling - Most customers will prefer to deal in their local currencies and unless you are prepared to do so, they may choose alternative suppliers. A currency converter tool on your website could be a valuable addition for your customers. © Crimson Business Ltd 2005
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