EXPORT OUT OF THE RECESSION
With the Irish economy in the doldrums, small firms are turning their attentions overseas and the Sunday Times consulted a number of experts for advice on how to “internationalise” a business.
Willie Wixted, co-founder of the Shannon-based ABC Nutrition which sells health and sports supplements to 11 countries, said the key was to think global as early in the enterprise as possible. “Our first customer was in Dublin, our second was in the UK. Start with the home market, learn the ropes, then look overseas.”
He said you had to prove to customers that distance was not an issue. A potential customer in Greece said that ABC was too far away to offer a good service. Wixted’s response was to send the product by courier that day and send out samples on a regular basis to build trust. “He’s now our third biggest customer,” he said.
Getting the price right is another crucial piece of advice. When considering a new market it was crucial to get your product or service there cheaply enough to make a profit, said John Whelan, chief executive of the Irish Exporters Association. “Check the market to see what your competitors are selling at and work back from there to see if you can compete.”
He said that anyone supplying a product to the Irish market would find that it is not too hard to bypass distributors and go directly to the retailer. In bigger markets that was not always possible so it was important to get a distributor and factor in their margins too. “Each step will take a percentage off along the way, so establish your price proposition before you start,” Whelan said.
The cheapest way to get a product in front of overseas customers was to visit a trade show. “They are a very effective way of establishing, instantly, market reaction to a production. If it is food, people can taste it. If it is a gizmo, people can try it. This is the small firm’s opportunity to get feedback in a very cost-effective way.”
Trade missions are another good idea. Thirty firms participated in a recent Enterprise Ireland mission to Moscow and participated in €9 million worth of deals. One of them was the Dublin travel software company OpenJaw Technologies, which employs 120 people and has grown sales by 10% in the past year. Only 2% of its business is from Ireland.
Declan McGuinness, the senior vice-president of sales with OpenJaw said: “Trade missions are a great part of market entry strategy. Potential customers overseas regard invitations to them as very prestigious. We expect to close out two large deals in the next 18 months as a result of that Russian trip.”