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How Brexit will impact Australian businesses in Europe?

shutterstock_115559758Five areas to watch in the post-Brexit climate for Australian businesses doing business in the UK and in the European Union  

Putting my disappointment aside to see the UK leaving the EU, now is the time to watch how things will evolve. And for me it means how it will impact our clients in the coming months or more likely years.

This article highlights of 5 areas that will change in the coming months. These areas are Tax, Intellectual Property, Norms, EU funding and Staff. The UK leaving the European Union has a direct impact on trading with Europe for Australian companies.

This is totally a work in progress and needs to be watched month after month. Business is expected to continue as usual until the UK is officially leaving the EU. It is estimated to happen within two years from now.

  • Value Added Tax and Import Duties need to be watched

One of the benefits of trading among EU member countries is that you do not pay custom duties in the EU. The EU also has defined import duties for each category of products to be paid when a EU member imports a product from a non-EU member.

It means Australian companies, will need to watch what import duties will be applied by the UK once it officially leaves the EU. It may well be different from the EU in the near future.

The other area to watch will be VAT. Swati Dhingra, Assistant Professor of the London School of Economics explains it simply: “Britain would not have access to the coordinated VAT collection of the EU. So a 20% VAT would need to be paid at the UK border, and the importer would no longer have the convenience of combining this with domestic VAT payments.”

These two points will be important to watch in the coming months and year.

  • Intellectual Property protection: One application for the EU and one for the UK?

Australian companies currently applying to protect their Trademark through the Madrid Protocol get to register their trademark in 97 countries in one application. The European Union (EU) is part of the Madrid Protocol.

In addition, if you would like to register your patent in the EU you currently will have to lodge an application for your patent to be valid in the 28 countries of the European Union.

Now if the UK exits the European Union, the question is in the UK market what will happen to your IP you have registered it under a EU banner, Europe-wide. It is clear that current applications will keep covering the UK, as part of the EU.

When the renewal comes up, or when a new application will need to be lodged, you will need to look again at what the UK has negotiated with the European Union.

  • European Union Norms: What about CE Mark?

In terms of norms, the European Union has harmonised its standards. It means that for example, a product which is CE marked, does not need in many cases to get additional certification.

Now once your products are CE marked, will the UK recognise as a valid standard? Hopefully yes, but what happens if not? In that case, the UK would have to create their own set of standards or negotiate with the European Union to use their set of standards. It would then mean that you would have a certification process for the UK and one for the EU.

Cost wise, that will have to be taken into account. Two certification processes instead of one? Let’s hope an agreement is found with the EU there as well.

  • Access to EU funding

Today, I was at one of my Australian clients. They have established a company based in the UK in order to access a European Union funding. Now they already anticipate to have to move their company either to Germany or the Netherlands if they want to keep benefiting from this funding over time. The CEO was telling me, he thinks they have no chance to get a EU grant again if they are based in the UK. It is the unknown right at the moment, but it will definitively need to be considered if you have a technology that can fit into some of the project that the EU is funding.

  • Travel of your Staff, hired by your UK company, within the European Union

If you have an established office in the UK and you have staff flying in and out of the UK to do business with the rest of Europe, then they will probably will have to go through a visa process for business visits. Depending on what the UK is able to negotiate with the EU, it might be a simple process. The minimum expectation is that it should work like other non-EU member, such as Swiss citizens.

When it comes to posting a staff, hired by your UK company for several months for projects in the European Union, then work permit arrangements will probably change.

If you want to read more, I found these articles below to be useful. This is still a lot unknown, and these five points will need to be watched by Australian companies doing business in Europe in the coming months. If you would like to discuss further, contact me on christelle.damiens@exportia.com.au or arrange a call on 02 8068 9155.

Articles to read:

About Tax and Custom Duties:

https://www.dlapiper.com/en/australia/insights/publications/2016/06/brexit-how-might-taxes-be-affected/

http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/vat_on_services/index_en.htm

https://www.theguardian.com/small-business-network/2016/mar/22/eu-referendum-brexit-change-vat-import-duties

About IP:

Brexit FAQ by Chartered Institute of Patent Attorneys: http://www.cipa.org.uk/policy-and-news/brexit-updates/brexit-faq/

European Patent Office declaration: http://www.epo.org/news-issues/news/2016/20160624.html

Implications of Brexit, by Amy Bishop, http://www.dwfoxtucker.com.au/2016/06/the-implications-of-brexit-what-impact-does-it-have-on-protection-of-intellectual-property-rights/

http://www.dwfoxtucker.com.au/2016/06/the-implications-of-brexit-what-impact-does-it-have-on-protection-of-intellectual-property-rights/

About Norms:

http://brandwoodbiomedical.com/brexit-and-the-ce-mark-implications-for-european-regulation-of-medical-devices/

http://ehoganlovells.com/cv/19d91c769247db29ba38d9db3d068b52328e2423

 

7 ways to accelerate your sales with large European Multinationals

Australian small businesses and exporters want to do business with large multinationals such as SUEZ, ALSTOM, BAYER, SAP, SIEMENS, AIR LIQUIDE, AIRBUS and why not the latest submarine contract holder DCNS as well? These are just a few examples.

What do have these companies have in common? They all are European businesses and they all have some form of operation in Australia. They also, all look like a labyrinth or a scary monster to smaller businesses. That is why I would like to share some insights on how we have done that for our clients at Exportia.

1. Have your positioning ready: what is your value proposition to them, what problem are you solving in this specific industry? How big is the problem? Is it recognised by the industry as a problem? You need to check that your positioning resonates with the targeted multinational. When we approached the railway operator SNCF on behalf of TTG transportation technology, we talked to them about energy savings. I had some insider information that it was one of the top priorities at a high level in the company, so I had my way in. You also need to check how you are comparing to other providers, in terms of performance, price, customer service and after-sales support. The bottom line is: it’s all about what’s in it for them! And not about what you offer.

2. Find a common connection with them: When I approach a large multinational on behalf of one of my clients. I, of course, look at my network first. Do I know anybody working there in Europe or in Australia?  Can they recommend a contact for us? Many people use LinkedIn to get in touch with new contacts. My experience is that it fails if you don’t have anybody recommending you to that person. I value my network a lot, I am genuinely interested in what people do. It means when it comes to approaching someone and asking them for a warm recommendation, I am comfortable in asking for an introduction, it does not come out of the blue.

3. Consider you just have one shot: I am quite straight forward when it comes to approaching someone in a large multinational. I tell that person precisely what I am after. I also make it easy for them, to forward my request to someone else. All the information is provided in a compact e-mail with a brochure attached. I also prepare it in the appropriate language, it can make it easier. Don’t assume English suits all Europeans.  Your approach, of course, should be professional, responsive and polished, amateurism is banned.

4. Treat negative answers with care: If you get a negative answer, still acknowledge, and thank the person for their time. You can also kindly ask the person for some feedback. I find that people are generally quite helpful. An important point is to ask if you may reach out to them again at a later stage if you find something that is more relevant to them. You may also ask them the authorisation to reach out if you ever need their expert advice. Interestingly, when it comes to innovative solutions, generally speaking, people want to stay on top of the latest innovation in their market, so they like to be informed of any innovation coming out. And they accept to stay in touch.

5. Develop your Key Account strategy: Once you validated an initial interest from that multinational. Now you need to establish a strategy to enter that account. In some cases, you won’t be able to sell directly to that European multinational. You need to map out their decision-making process and the suppliers they are using for your specific product or solution. For example, large European multinationals usually have up to three preferred distributors that they use to source things such as, industrial tooling or safety equipment. How can you work with these suppliers/distributors? Again, your positioning is important, as you will need to use it when approaching that supplier. Use the interest of this multinational as your trading value with the distributor to get in.

6. Implement and persist: I know it sounds dumb, but IMPLEMENTING the strategy is key. This is the hard part because we can all strategise in our board room, but only a great implementation pays off. Your mapping is done, your positioning is right, now you need to roll out. You need to actually get in this supply chain. Select the right partner, they need to be aligned with your objectives. You can only select and work with distributors that are actively working and developing their relationship with the large multinationals you are interested in. Now you need to get them interested, they need to see how you can fit in their range. Study their current range thoroughly and how it fits with you.

7. Activate your channel partner: Now this is a full on process in itself. It deserves a whole article! The first key element is passing on your product knowledge down to them. You simply need to train their sales team and enable them for quick success with your products. There are so many ways to do that. I’d advise you to combine e-learning, with marketing material (in their language), face to face training, case studies in different industries and regular follow-ups. The key is for you to monitor the relationship with the key account while doing that. Your distributor will be interested in your ability to create interest among large multinationals, you will go up on their priority list. This is what you want. Also, keep checking in with these large accounts while working with the partner. You need to make sure they are well looked after. The value of a channel partner is that now it will multiply your reach and make sure you can not only reach one multinational but a hundred.

At Exportia, we have run and implemented that process for many of our Australian clients. So if you find you would like to accelerate your sales in Europe, contact me today and my team and we can get you started: christelle.damiens@exportia.com.au

What should you do in May? Managing the European calendar and what it means for your sales

Travelling to Europe in May

As an exporter to Europe or as you are getting ready to start investigating the European market, there are few things you need to know about the Month of May.

May is a month full of public holidays throughout Europe whether it is religious (Ascension); the celebration of Spring or a historical date such as Labor Day (1st of May in several EU countries) or the 8th of May marking the end of WWII celebrated by the French.
So it means a few things for Australian exporters to Europe:
So before you plan your trip to a specific European country, check when are their public holidays. Otherwise, you will struggle to obtain meetings and won’t make the most of your trip.
The normal practice throughout Europe is to start arranging your meetings 6 weeks in advance. It will suit the Germans as well as the Italians although the Italians might find it a bit early!
This is a safe practice if you already know the companies and the persons you are targeting. If you are starting to target a European country for the first time, and your product or brand is unknown there, the process will take much long you need at least three months to make the initial contact and convince prospective clients or partners they should meet you.

Racing to finish off projects before the European Summer slow down time

May is the time to accelerate any business discussion you had in Europe throughout the year before the business goes into limbo in July and August.
Your objective should be to sign a distribution agreement, close a deal or formalise a partnership by the end of June before everything slows down in July! Otherwise, you are at risk of your European business partner postponing things to September!
Of course in terms of sales you are losing months! As a small business, we can’t afford to do that.

Preparing for Trade Shows

The European Trade Show season starts from the end of August and will last until early December. That is when most major European trade shows happen.
In May, it means you already have submitted your application to exhibit, and it has been accepted. You should just be discussing the location in the hall at the latest.
Now you need to get organised marketing wise: what is your stand going to look like, which message is going to be prominent this year. It is a good time to determine what marketing material you will have available for the shows.
I’d recommend to find a European printer and get them to print it locally and have it delivered to the European Union. Too many times, we want to deliver brochures to a distributor for a show, they are shipped from Australia and customs charges the distributor for import duties!

In May, you should already have sorted out your accommodation, especially if we are talking about an International Fair. You can then get the best deals for the team.

To manage that planning for our clients, we usually set-up a retro-planning document with a checklist, if you would like to get a copy of it contact me on christelle.damiens@exportia.com.au

If you find it hard to arrange meetings with European clients, read my blog next week where I’ll share plenty of tips with you. Watch this space!

Choosing the Right Country in Europe

In the first of our “Go to Europe” series, we discussed the importance of choosing a product that will be successful in the European marketplace. Once your company has committed to that product, you need to decide which country to target. Contrary to popular belief, European countries differ quite greatly from one another in hi-tech markets. For example, if your company has created a new innovation for aircrafts, your product would fit best in France’s growing aeronautics market.

To help you navigate the process of finding the right country to target, we have created a simple five-step checklist:

1. Look at your incoming inquiries

Where are the majority of your website inquiries coming from? If there is an overwhelming amount from a particular country, there is likely a reason for that.

2. Look at your Google Analytics

This feature allows you to see where the top hits on your website come from. Analyze your webpage statistics and try to find common trends in the data.

3. Find your target industries

In which European countries are your target industries? The demand for various industries certainly differs across borders.

4. Reach out to current clients

One of your most valuable channels is your current customer base. They will provide a unique perspective on expansion to Europe, and might even help you introduce your product to the European market.

5. Identify criteria to select the best markets

Understanding what criteria is important for your product will allow you to narrow down the options and focus on certain aspects.

Aside from the tips we have provided, there are many other areas that your company could analyze. Choosing the right country will gateway you to big opportunities, so it is okay to spend a little more time researching each country. For more information go to: http://exportia.com.au/downloads/