Selling into Europe – first steps
Do you want to sell to 508 million European customers? If Yes, what next….?
In my last blog (Get a European Base – Fast!), I introduced the idea of the ‘Golden Ticket’ – investigating with your current customers whether they would like you to set up a European base in order for you to give them a European based service. This is the first place to start. Heading into a European adventure knowing that an existing customer will support you to get established is the softest landing of all.
If this opportunity is not there, what are the steps?
The first step is to identify which countries provide the best opportunity for your products or service, the most exciting future demand and the easiest cultural fit. Some solid market intelligence is needed to get the basics on paper. I use a simple matrix setting out some of the key criteria – market size, market growth, competitor presence, pricing and margin potential, currency issues, trade challenges etc to rate the target countries.
There is also some terrific online Business Intelligence tools available – just shout if you want guidance.
Buy an air ticket
Once you have identified the markets on paper with the best potential, I would buy an air ticket. There is no better way than to explore the ‘on the ground potential’ for your product or service than visiting key players, attending an important exhibition or meeting journalists and industry bodies. When I undertake these exploratory visits I plan meticulously to ensure I make best use of my time in country and also keep a daily journal so I can reflect on all the key conversations and stats when I return home.
After an exploratory visit you will normally be buzzing with ideas to appoint this distributor, hire this agent or attend this exhibition. My advice is to take a deep breath and first commit to some headline numbers. An hour on a spreadsheet to set out your instinctive numbers in terms of unit sales, price, margin and direct costs for getting established will open your eyes.
The numbers are good on two fronts – firstly they will set out clearly the likely costs and benefits of your engagement and secondly they will begin to shape your market entry thinking. For example, if your instinct was to open a fully funded subsidiary office, the numbers just might set out too heavier a risk if your three largest competitors are already present and busily commoditizing the market.
Another quick thought – your outline numbers and new market knowledge just might mean that you can apply for a UKTI Export Grant. For SME’s, this could be a simple £1500 for attending an exhibition or a more substantial grant to support a full market entry strategy. In post Brexit Britain I sense the government will be even more willing to support our exporters. Open to Export is a great place to start.
In the next blog, we will look at how you build a full international market entry strategy.