Breaking Through Borders

How implementing certain strategies can help SMEs overcome exporting challenges.

Nando Cesarone | UPS

As unbelievable as it may sound, the only source of economic growth in Europe between 2008 and 2013 came from exporting goods and services. Today, exports are still the most important – but fortunately not the only – engines for growth, according to the European Commission.

Making up over 99 percent of all businesses, small- and medium-sized enterprises (SMEs) in Europe are big contributors to this growth – and I have the opportunity to witness their success stories on a weekly basis.

Exporting success in Austria

Take the Austrian tech company Rascom, for example. A few years ago, Rascom’s leadership realized that the continued rise in online shopping created an opportunity – and a challenge – for them to start selling their products worldwide.

Rascom develops, markets and distributes something that many of us probably don’t even think about, but is nevertheless critical to keeping all of our businesses up and running: IT cooling systems – their best known being the Noctua brand. These are essentially the fans that keep our computers and laptops from overheating.

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More and more SMEs are taking their first steps outside of their home market.

Rascom’s superior products helped them quickly grow their reputation as one of the best in the industry. And as their reputation grew, so did their sales – and their desire to expand their horizons beyond Austria.

At UPS, we’ve built our business on helping companies like Rascom navigate the opportunities created by cross-border trade. When Rascom came looking for a solution, we provided the expertise and technology they needed. Today, Rascom efficiently and reliably exports products to their customers in 30 countries around the world.

More and more SMEs are following Rascom’s example by taking their first steps outside of their home market. However, the majority of European small businesses are not exporting – either because they do not see the benefits of doing so or they do not consider themselves ready.

What looks like a straightforward decision on paper is sometimes more difficult to execute in reality. The practicalities of exporting can stop SMEs from taking the next step.

Our recently published 2016 UPS European SME Exporting Insights Study, which surveys 12,000 SMEs in eight European countries, shows that on average only 22 percent of SMEs are exporting.

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The majority of European small businesses are not exporting.

According to our research, the risk of damaged or lost goods, customs regulations and paperwork and tariff barriers when shipping outside the EU are keeping SME owners awake at night.

Strategies for overcoming boundaries

We know these barriers to exporting can be challenging and confusing for small businesses. However, the rewards can be significant if it is done right. Our study shows that more than half of European SME exporters experienced revenue growth over the last three years.

For the first time, we also identified how close non-exporters in Europe are to entering the export market and what kind of skills they think they must improve to make the transition. According to the companies we surveyed, the most important issues they need to address are the following:

•   Improving customer experience

•   Taking advantage of e-commerce

•   Obtaining market intelligence about customer needs and expectations

These issues can be daunting, and a few years ago they may have only been addressed by larger companies with the investment capacity to build their own cross-border business. But this is no longer true.

Today, a small investment in software and a multi-language website is enough to tell the world about your product and respond effectively to customer requests. In addition, accurate online tracking services give your customers the confidence to know where their order is and when it will arrive.

Once orders start rolling in, having the right supply chain and logistics partner by your side who can help you figure out things like returns, distribution, warehousing and customs regulations can make the difference between success and failure.

Exporting SMEs need to know that their shipments are going to get where they need to be, when they need to be there and in full compliance with all relevant regulations. When they have that assurance, they can focus on what they do best: creating and selling their innovative products.

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Smaller companies are the engines of prosperity in even the most advanced economies.

Smaller companies are the engines of prosperity in even the most advanced economies. In an increasingly connected world, these businesses can reach customers both down the street and across the globe.

The world is open for business and more and more European SMEs are realizing that there is no time like the present to break through borders and grasp new opportunities for success. goldbrown2

This article first appeared on LinkedIn Pulse and was republished with permission.

You might also like:

Breaking Down Supply Chain and Logistics Trends in 2017

How to Win With Online Shoppers in Canada

The Seven Lessons of Successful Exporters

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Nando Cesarone is President of UPS Europe.

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