Wiltshire based group Scanning Pens sells ground breaking products to help dyslexic students pass exams around the globe. In the past two years, it has opened an office in Florida to build its US arm and is set to open two more in Canada and Australia later this year. It has also developed a network of re-sellers around the world with exports heading to Africa, South America and Asia. The Department of International Trade helped the firm research the US educational market, meet teachers and educators at trade events and introduced it to a US based Brit – Roger Frampton of Export Action – who helps new UK exporters find their feet.
“He helped us set up our office and deal with practical things such as opening bank accounts and recruiting staff," says co-founder Jack Churchill. "We are on the path to becoming a global business.” The group has worked with manufacturers to develop electronic pen scanners, including the C-Pen Exam reader which, when guided along a written exam sheet, reads text out aloud so dyslexic students and those without English as a first language can better understand the questions. Churchill says: "Our UK market is not saturated yet but we are aware we have world leading technology and we want to go abroad and sell it. We want to replicate what we have done here overseas.”
The Brexit issue
The success of Scanning Pens in finding new markets is a good example of the opportunities available despite Brexit. The vote to leave the EU can be viewed as either the UK lifting up the drawbridge against further globalisation or freeing up businesses to seek new trading opportunities outside the EU. It has already impacted businesses dealing with overseas markets as the plunge in sterling has made exporting cheaper and importing more expensive.
“There is more uncertainty around doing business internationally. There are concerns around extra custom and VAT costs, increased processing times for goods, changes to legal and tax regulations and movement of people restrictions,” says Stuart Rogers, corporate tax partner and international specialist at business advisors PKF-Francis Clark.
“You will have to be more cautious and manage your risks but developing an overseas business is still the right thing to do for growing firms. We are seeing more and more niche businesses, whose potential customers are much further afield than has traditioally been the case.” Going global can be achieved by exporting, licensing your product, franchising, developing manufacturing bases, opening offices or building via a joint-venture. “Increasingly businesses are using the internet as a portal to reach global customers,” says Rogers. “A decade ago only big business had the capability to do this but now anyone can sell products online using Amazon or Shopify.”
Do your research
Whatever form it takes the basic ingredients of success remain the same – research and planning. “If possible you should go out and learn about the overseas markets which may be interested in your products. You need to meet potential customers and suppliers,” says Rogers.
“This can be through trade missions run by the Department for International Trade or even virtual missions on Skype. You then need to think about agent and distributor arrangements overseas and, in due course, recruit local sales people. Forming a joint-venture can help you build the necessary contacts on the ground.”
There are many issues around tax, the law and accounts which must also be tackled. These include overseas staffing, personal tax for UK personnel abroad, foreign tax and health and safety regulations, repatriation of profits and protecting intellectual property.
You must also become au fait with local culture – both social and business habits. “Take your time and do proper market due diligence. Utilise your business network and peers to find, for example, a French lawyer who could help you on local matters,” advises Nick Davis of law firm Memery Crystal. “The UK Government provides assistance so make use of them as well. Get all your ducks in a row before you move. If there is a compelling reason to go then don’t sit back.”
Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.