Detailed research is essential and outside advice will most likely be needed. Matters to cover will include market research, competition, compliance of product specification with local market requirements, transport, insurance, product liability, etc.
2. Business Plan
A detailed business plan must be drawn up and finance be made available. It is obvious, but often overlooked, that an important part of the budget is the time of management and staff. Production facilities must be able to ensure delivery on time. The reputation of British exporters is improving but still has some way to go.
It is essential to take advice no matter how well one thinks one knows the market. There is an abundance of good quality advice available at no cost from the Department of Trade and Industry and other government bodies, as well as trade associations and other industry organisations. As the project advances more specific and local advice will be needed, at which point it may well be necessary to pay for it from local professionals. The quality of local professionals can vary considerably and it is important to use only those who have come with a recommendation. Always ask for fee estimates and a timetable.
This need not be a problem as many business people on the continent speak English and will almost certainly have somebody on their staff who will be able to assist. Language is not the only bar to communication – culture also has an important part to play – no matter how good the language communication. A good adviser alongside your team is an invaluable support.
Invariably, whichever route is taken a partnership will develop – whether it is with one sales person acting as agent with a higher risk of putting too many eggs in one basket, or using the services of an established agent to distribute your products. The choice of such an agent needs great care and the track record must be checked thoroughly and must demonstrate success in the chosen field which will be backed up by examining the published accounts of the business as well as talking to the competition. Avoid anything that hints at a turnaround situation – such as the need for new/replacement products etc. Managing a disaster from abroad will only go one way.
Good organisation is essential at all stages to be on top of the abundance of information you will get.
Notes should be kept of all meetings and telephone conversations and written confirmation should be sent following each meeting stating clearly the points which have been agreed. Frequently, two people can leave the same meeting having spoken the same language but come away with completely different understandings of what was decided. Nothwithstanding language fluency, there are still cultural differences which are difficult to identify and to overcome. The same words mean different things in different cultures.
7. Check and Double Check
Every important piece of information you receive should be checked and double checked. Promises must be in writing and timetables must be carefully assessed. It is essential to have a full understanding of the details rather than to leave them to somebody else because it is all ‘foreign stuff’. Again, there is no substitute for good advice.
Getting paid is the most important point of all. Thorough credit checks should be made on any agents or intermediaries used. It may be possible to be paid all or part in advance. Letters of credit and even bills of exchange are fairly widely used in continental Europe and advantage should be taken of this facility. Good banking relations with a local bank should be established early.
9. The Launch
It is wise to start slowly and carefully depending upon the resources you wish to invest. The lowest cost of entry can be by using one person as a travelling salesman with VAT representation managed by a local accountant. However, much is dependent on one person – opportunities could be lost and the reputation damaged before you really get going. Cheapest is not always best.
10. Keep an open mind
Be prepared to abandon all preconceived ideas. What is unthinkable at the outset may be the best course for the future. Experience is a major benefit. Working with an agent may lead to closer ties. Even marriage may not be completely ruled out! You may take a share in the agent and the agent can take a share in your business. Together you will be stronger to take on a larger market and grow and prosper in partnership and fulfil the demands made on your business. Do not forget that the competition is probably thinking along the same lines at the same time.
Developing your market reach into continental Europe is clearly a move of expansion. However, time is not on your side. It is most likely that your competitors have the same ideas. You may soon find them in your own back yard. Therefore, to expand is to defend.
- Christopher Thubron, senior partner at Moore Stephens’ Brussels office (Moore Stephens Wood Appleton).
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