Key things to consider when choosing exporting markets
Tools & Resources
Key learnings
- The UK has signed a number of Free Trade Agreements (FTAs) with countries around the world.
- When choosing a new export market, it’s important to consider local competitors, regulations and what business support is available.
Finding new markets to sell your goods and services is one of the best ways to diversify your business and make it more resilient. What’s important to focus on if those markets are overseas is gaining a deep understanding of the barriers, competition and costs you might face doing business abroad. In this article, we highlight the key things to consider when choosing exporting markets.
If your business model has been successful in the UK, chances are it could be successful in other parts of the world.
But before you dive into exporting your goods and services to new destinations, it’s important to understand any dynamics that might affect your ability to do so.
Click below to find our key considerations for choosing new exporting markets.
1
Scoping the opportunity
When you’re looking at a new export market, some good questions to ask are:
- What is the size of the market relative to the UK?
- How mature is your industry/sector in the new market?
- Can you be competitive from a cost perspective?
- Could you gain first mover advantage?
If there is a large market for your goods and services in the new market and a lack of maturity in the sector you operate in, then it’s likely a great opportunity for your business to export to.
2
Market research and competitor analysis
Learning as much as you can about the new market before deciding to export there is essential work and can help you manage risk throughout the process.
Key to getting this right is identifying and researching competitors, whether they be local companies that already have a foothold in the new market or international organisations that are trading in many countries.
You must consider whether you can compete with these other businesses either from a cost perspective or by offering something new and unique, which has the potential to disrupt the market.
Check out our introduction to market research and competitor analysis.
3
Trade barriers, rules and regulations
Trading internationally can be a complicated process depending on the country you are looking to export to.
For example, if you are looking to send goods and services to a country which the UK has not signed a free trade agreement (FTA) with, then when they get to the destination, they might be subject to additional tariffs, taxes and fees.
Even exporting to areas where FTAs are in place is not straightforward, with each market having its own internal regulatory standards that must be adhered to.
The Department for Business and Trade (DBT) has detailed exporting guides for most countries.
4
Ease of doing business
Due to a number of factors, it is generally considered to be more straightforward doing business in some countries over others.
Here are the main things you have to consider when evaluating the ease of doing business in a new market:
- Regulations: What local rules must I follow and what standards must my goods and services meet?
- Legal systems: What legal protections will I have for things like copyright, intellectual property and data privacy?
- Infrastructure: What local infrastructure is in place that will enable me to distribute my goods and services?
- Culture: What are the local cultural norms and how might they affect my business?
- Political systems: How settled is the local political system and is there any potential for civil unrest and a breakdown of law and order?
- Business support: What local support is available for businesses i.e., funding, grants and advice?
Check out The World Bank’s Business Enabling Environment (BEE) survey for a comparison of countries on ease of doing business.
Next steps...
- Check out UMi’s guide to trading internationally and conducting market research and competitor analysis.
- Learn about local rules for different export markets using DBT's country guides.
- Find the best countries for ease of doing business using The World Bank’s survey.
- If you need support with getting started in export, visit the GREAT website for businesses in Great Britain and Northern Ireland, and Scottish Enterprise for businesses in Scotland.