Manage the risks of exporting

Minimise the risks of exporting

Guide

Exporting can present risks and challenges for your business. You can't eliminate these risks altogether, but you can manage and minimise them.

How to minimise risk when exporting

The first step to minimising the risks of exporting is to conduct thorough market research. Market research helps you understand the risks of doing business in a particular country. You can then decide how you want to control those risks.

Researching export markets online is a useful start, this can help you to pull together valuable information which can be crucial to your export planning. Read specific exporting country reports.

You should also check whether the UK has any agreement with the country to help reduce export risks.

You are likely to want to visit the country to learn more. Support and subsidies may be available through events and visits arranged by Invest NI. Read more about building your knowledge of overseas markets and conducting in-market export research.

Working with the right partners can also help you reduce the risks as you can benefit from their expertise and contacts. For example, you might work with a reliable agent or sell through a local distributor.

Reducing financial risk when exporting

Before agreeing an export deal, you will want to assess the impact on your cashflow and make sure you have enough working capital.

You may want some kind of insurance cover. Read more about risk management and insurance services.

Read information about insurance for international trade.

If you are trading in a foreign currency, you also need to protect yourself against foreign exchange risk. The amount you receive (in pounds sterling) could be lower than you expect if the foreign currency falls. You can protect yourself using forward foreign exchange contracts and currency options. Read more about foreign currency and exchange risks.

UK Export Finance support

UK Export Finance, the UK's official export credit agency may be able to offer you an export insurance policy, export credit guarantee or other product if your export contract is for semi-capital or capital goods and related services to the value of at least £20,000. For non-capital goods, if you have been unable to arrange an export insurance policy through a commercial provider, you may be eligible for a UK Export Finance product. UK Export Finance's range of products and services include:

  • insurance of UK exporters against non-payment of an export contract by overseas buyers
  • the guarantee of bank loans to help overseas buyers finance purchase of goods and/or services from UK exporters
  • sharing credit risks with banks in order to assist exporters in the raising of tender and contract bonds, in accessing pre- and post-shipment working capital finance and in securing confirmations of letters of credit
  • insurance of UK investors in overseas markets against political risks

Read more about the financial support for exporting.

Note that the actual amount and terms of support available will depend on the risk involved.