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Is your business ready to export to Europe?

Are you ready to export to Europe - Amsterdam - Guide My Growth

From time to time, I moderate webinars for CBI. CBI is a Dutch organisation whose objective is to increase imports from developing countries. The webinars inform businesses in Africa, Asia and Latin America about opportunities on the European market. They also offer information about the requirements to enter the European market.

After each webinar, many businesses ask me to help them export their products or services to Europe. Unfortunately, most of them are not yet ready to export to Europe.

When are you not ready to export?

Your business is not yet operational

Many of the people that attend CBI webinars have not yet started their business. They hear about opportunities in Europe and want to start a business to take advantage of the opportunities.

If your business is not yet operational, no European company will do business with you. If a business has just started operating, they will also not do business with it.

Why?

Because the risk is too high.

A business that is not yet operational has not yet proven itself on the market. You can only know whether a business will be successful after it starts operating. Until a business has been tested, it is unproven.

Unproven equals high risk.

Your business is too small

Exporting is expensive.

Most small businesses do not make a lot of money and cannot afford the costs associated with exporting.

For example, they may lack money to cover the cost of transportation and insurance.

Small businesses may also struggle to deliver the minimum order quantities that European buyers require. Or, they may be able to do so once but not on an ongoing basis.

For a buyer, this is unacceptable.

Export to Europe - Guide My Growth

Your business can’t meet EU requirements

The European Union has many laws, rules and regulations. They were created to achieve a level playing field for all parties. Meaning: no business or organisation should have an unfair competitive advantage. Therefore, these laws and regulations apply to all equally.

it is very important to the EU to maintain this level playing field. That is why entry requirements are non-negotiable, especially for product requirements and food safety.

Implementing mandatory European quality and safety requirements in a business is expensive. But it is not possible to do business with Europe if they are missing. These investments must be done before getting even one European customer.

Many businesses do not have the money needed to make these investments. These businesses should consider following an organic growth strategy to increase profits and grow their business. They can then slowly invest to meet European requirements.

You lack a solid Go To Market strategy

This is the main problem that I see when I talk to businesses.

Many businesses are just ‘trying their luck’ and hoping for success.

They go to trade fairs and business conferences and collect as many calling cards from European buyers as possible. They then send emails to all of these buyers or call all of them. Hoping that one or more will respond and place an order.

They are almost always disappointed.

There is a key reason for this lack of success: working with a European buyer requires a different approach.

For businesses, this means that they must do some homework before deciding which European buyer to contact. The homework includes:

  • Understanding what kind of buyer is a good fit for their business
  • Knowing what the buyer’s pain points are
  • Understanding how their product or service can solve the buyer’s pain points
  • Knowing how best to communicate this information to a buyer

The commonly used but unsuccessful ‘try your luck’ approach is not a sign of unwillingness to do this homework. Rather, it comes from not knowing how to develop a solid Go To Market strategy for the European market.

Guide My Growth offers a free Export Readiness Assessment for businesses that want to export to Europe. If your business is not yet ready, you will receive a short report. It explains how to become export ready and how to create a Go To Market strategy. Click on the below image to take the assessment.

Export Readiness Assessment - Guide My Growth

What to do if a business is not yet ready to export to Europe?

When a business is not yet ready to export to Europe, it has 3 options:

  • Sell to countries and buyers with less stringent requirements
  • Join an export support programme to become EU export ready
  • Forget about Europe and focus on growing the business locally

1. Sell to buyers with less stringent requirements

Businesses that are too small can sell to countries and buyers with less stringent requirements. This can be a good way to gain experience with export. It can also provide insights into where improvements are needed.

Businesses can also consider partnerships with other businesses. Partnerships can help businesses increase profits and accelerate their growth.

However, both of these strategies may take time to bring good results.

2. Join an export capacity building programme or get guidance

Many European countries have programmes to help businesses build export capacity. For example, organisations like CBI and IPD run various programmes in various countries but their programmes are limited to specific sectors. Other organisations, like Open Trade Gate Sweden, offer tailored advice to businesses who contact them.

The International Trade Center has an SME Trade Academy that offers courses about export development. They also offer a free online programme that explains how to take advantage of the African Continental Free Trade Agreement. I have previously explained why African businesses should get serious about business growth to maximise opportunities at home.

Most countries in Africa, Asia and Latin America have trade promotion organisations. These organisations offer training and capacity building for businesses that want to start exporting. Chambres of Commerce and business associations sometimes offer export capacity building too. They also usually have contacts with foreign buyers.

Finally, many commercial businesses – including Guide My Growth – offer export capacity guidance and coaching. The offers vary. Some are offline, while others are online or hybrid. Some offer group programmes while others may offer fully customised 1-on-1 programmes. For example, Guide My Growth offers online and hybrid programmes, for groups and individual businesses. Guidance and coaching is provided by European export experts to guarantee quality and easy access to potential buyers.

Note that programmes also vary in price. Programmes offered by international organisations may be free while others are paid. Most programmes do not offer funding. This means that businesses will have to pay for any investments to meet requirements etc.

3. Increase your profits and grow your business

Some businesses want to start exporting because they hope it will lead to higher profits.

They are less interested in Europe and more interested in finding ways to grow their business.

For these businesses, the key question is: How to increase profits and achieve faster growth?

Since most of these businesses already sell products and services in their home countries, they have multiple opportunities to increase profits.

A simple but highly effective strategy is to identify and focus on the Most Profitable Customers in a business. These are the customers that bring in the highest profits. When businesses focus on attracting more of this type of customer, sales, profits and cash flows increase. As a result, the business starts growing faster. Yet, it is a strategy that only a few businesses apply.

Conclusion

Exporting to Europe can be very challenging for small businesses because of the costs and requirements.

Some businesses can participate in European export capacity building programmes. Others can use services offered by trade promotion organisations in their country, Chambers of Commerce, or commercial businesses.

However, for many businesses, the best strategy is to first focus on building up their business locally before trying to export to Europe.

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