Big break for the borders

Struggling to enter foreign markets? Join an export club, where you'll receive advice from like-minded UK businesses
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The Independent Online

Over 98 per cent of businesses in the UK are small to medium-sized enterprises (SMEs). They form the backbone of the nation's economy, providing employment for around 12 million people - more than half the current workforce - and generating half the nation's wealth.

Over 98 per cent of businesses in the UK are small to medium-sized enterprises (SMEs). They form the backbone of the nation's economy, providing employment for around 12 million people - more than half the current workforce - and generating half the nation's wealth.

But when it comes to exporting, the UK's SMEs are the laggards of Europe. As a member of the EU, not to mention an island, it may be expected that British companies would be natural exporters. It is far from the truth. For most SMEs, exporting is perceived as a hassle they could do without.

According to Grant Thornton's International Business Owners survey 2004, only 40 per cent of UK companies are exporting, four per cent below the EU average.

Even the recent enlargement of the EU has failed to spur British business into export action. Only 12 per cent of businesses think that the 10 new members will lead to more export opportunities, compared to 56 per cent in France and Germany.

British businesses need all the help they can get if they are to compete in the international trade market. The export club movement is one attempt to address this issue, by encouraging and supporting more SMEs to develop their export business.

The name export club is actually a misnomer. The clubs are not just aimed at exporters or would-be exporters, they cover all areas of international trade - imports, exports or other trading relationships.

In their initial conception, the clubs were about businesses helping one another. They were groups of businessmen getting together on a regular basis to discuss topics of common interest with regards to exporting; swapping tales and sharing experiences. They were self-contained groups, self-funded, with little or no input from other local business bodies such as chambers of commerce or business links.

"We formed the club about 10 years ago," says John Watson, chairman of Kent International Trade Club (KITC). "Local businessmen, all with an interest in international trade, got together to see how we could boost not only our own business, but the export business of the region as a whole. There was nothing at the chamber of commerce or business link that fitted the bill, so we set up our own club. The members are a mixture of businesses who are already exporting or who want to export, and firms providing exported-related services, such as freight forwarders, insurance and lawyers."

The emphasis is on businesses getting practical advice from other businesses, rather than relying on professional consultants and advisers who, although useful, often lack first-hand experience.

The clubs organise networking events, seminars and presentations. Where possible, it will be businesses presenting their own international experiences to the group, but speakers from external bodies such as the Institute of Export, Customs and Excise or foreign embassies are invited to talk on specific areas of interest.

In Manchester, for example, the commercial officer from the British Embassy in Sweden attended an event organised by North Manchester International Trade Network earlier this month. It was followed by two days of one-to-one meetings with members to address specific questions.

"Events are based purely on the interests of the member companies. If there is interest in a particular topic or market, we will try to organise an event. It might be a presentation from an existing member or it might mean bringing in an external speaker if they are best placed to talk about that topic," says Charles Jacobson, coordinator of North Manchester International Trade Network, which runs export clubs in Oldham, Bolton, Bury and Wigan.

Many of the clubs also help organise trade missions to overseas markets or visits to relevant local facilities, such as the recent visit to the port facilities at Chatham Docks by KITC.

Although conceived as stand-alone business support groups, the independence of many export clubs has been curtailed in recent years due to increasing demands on their members' time. The result is that over half now rely on local chambers of commerce, business links or councils for administrative or financial support.

On Merseyside, for example, Knowsley International Trade club, Liverpool chamber of commerce, St Helens chamber of commerce and three other chambers of commerce in the region are partners in the Chamber on Merseyside International Trade forum (COMIT), which coordinates the region's export clubs.

"Many independent clubs were victims of their own success. As they grew, they became harder to manage, to the point where the members didn't have the time to do it themselves. And there is a logical link between the roles of the business links and the export clubs," says Jacobson.

KITC is one of the relatively few that doesn't have formal links with the public sector. It has corporate sponsors such as CNA Insurance, HSBC and DHL who provide funding and other support. The local business link does have a representative on the management committee, but provides no other assistance.

"We have purposely kept our distance," explains Watson. "It is largely because we got our fingers burnt when we were closely associated with a local chamber of commerce which went bust fairly spectacularly. We tend to plough our own furrow now."

No matter who runs the club, the objective is the same: to give small businesses the knowledge they need to develop their international trading success, whether first time exporters or existing exporters looking to break into new markets. And it works. While an export club is unlikely to be able to single-handedly propel one of its members to international trading glory, it can provide an invaluable introduction to the challenges and rewards of exporting, as told by a business which already has first-hand experience.

Official guidelines and regulatory information can't be ignored, and export clubs include this kind of guidance in their events programmes, but the real value of an export club is in the more informal exchange of practical information.

David Beesley, export director of North Downs Dairy in Sittingbourne, is a regular attendee at Kent International Trade Club. An experienced exporter - North Downs Dairy exports to 35 countries - he nevertheless recognises the value of the export club in providing information and contacts that are not available elsewhere.

"The value is not just in the events, but the information you come away with often sparks off other ideas and angles that weren't apparent beforehand. You have to be realistic in terms of what you get out of it, but as an integral part of a larger export strategy they can be valuable forums for exchanging information," he says.

Exporting to 35 countries may be beyond the reach of many small businesses, but exporting isn't about the number of countries you trade with, it is the size of the orders you bring home.

There is invariably a fear factor involved. Perceived problems about regulations, customs duties, payment or labelling, for instance, which can deter a business from attempting to enter foreign markets.

But those preconceptions quickly evaporate when armed with the right strategy, practical information and realistic advice. It is precisely what export clubs were set up to provide.

In praise of export clubs

It is fitting that John Mann is happy to praise his local export club as his whole business is based on the church

John Mann is MD of Hayes and Finch, a manufacturer and supplier of church furnishings. He is also a member of Merseyside's Knowsley International Trade Club.

Hayes and Finch has just opened a new office in Philadelphia. It is the company's first step into the potentially lucrative North American market. In fact, it is its first foray outside the UK, and one that Mann says has been made considerably easier by the support and advice he received from the Club.

Hayes and Finch is a market leader in the church furnishings sector in the UK. But as church attendances dwindle, it is faced with a declining market it can do little to prevent.

Put off the European market by the language barrier and the cost of modifying products to suit continental tastes, it saw America as a more attractive option for a new market. Mann contacted Knowsley International Trade Club to try to obtain some relevant guidance from its members.

"The help we got was invaluable. From drawing up a detailed plan to researching the market," he says.

He went over in May on a research visit and by July had set up a wholly owned subsidiary, Hayes and Finch Inc.

Mann has been back to the Club to talk to other members about his experiences. It's the kind of business-to-business exchange that export clubs were founded on. "I gave a talk about the process of setting up in the US. It is very easy for professional advisors to talk about issues, but it is us, the actual businesses, who have to deal with the nitty-gritty problems on the ground," says Mann.

He is now encouraging other small to medium-sized companies to piggy-back on the infrastructure and systems he has invested in, to enable them to gain a cost-effective foothold in North America.

"If we can use our experience to help other would-be exporters, we are quite prepared to do so," he says.