Opportunities for SMEs

  • Export Finance for SMEs

    Posted 07/10/2014

    Export finance

    UK Export Finance is the UK’s export credit agency. The organisation is well established in the UK, with a clear remit to support UK exports with a view to benefiting the economy. They do this by providing insurance to exporters and guarantees to banks to share the risks of providing export finance. In addition, they can make loans to overseas buyers of goods and services from the UK.

    What type of insurance might businesses wish to consider?

    Two of the main types are;

    • Insurance for UK exporters against non-payment by overseas buyers, and;
    • Insurance for investors in overseas markets against political risks.

    However, sometimes exporters find that even if they do secure a significant export order, there is little support from the banking sector to enable them to realise the order. Not many SMEs have sufficient financial standing to secure funding from banks and thereby qualify for the insurance on such loans which is available to banks through UK Export Finance.

    Finance may be needed throughout the process of sourcing raw materials and manufacturing until full payment has been received on an order. However, often innovative arrangements for financing different stages of an export deal can be agreed with the customer. A recent example of this in respect of exports to Kazakhstan was where a security company won a £1.4 million order for a project to provide protection to a school (funded by international oil companies). Significant outlay at the manufacturing stage was alleviated by the customer in Kazakhstan agreeing to pay 50% of the unit costs upon delivery.

    Good business relationships are always an advantage

    Clearly, it is to the exporter’s advantage in this regard if a good business relationship has already been established, either directly or through an intermediary. Small business owners often don’t have the time or resources to pursue international sales. However, if there is a demand for their company’s products or services, use of an export intermediary can prove extremely beneficial.

    If you would like to talk to us about the prospects of your SME exporting successfully to Kazakhstan, please get in touch.

    Posted in: Opportunities for SMEs

  • Overcoming barriers to export

    Posted 23/09/2014


    A recent article in the ICAEW’s Economia magazine highlighted that one of the main blockers to businesses choosing to export to a foreign country was concern about difficulties understanding local culture. Overseas UK embassies often fall short when it comes to business expertise, even if such resource is available, so there can be little help on hand for companies struggling to adjust to local business practice and customs.

    But if businesses don’t find a way to bridge this gap, could they be missing out on some of the most lucrative export markets? Kazakhstan is a country the size of the whole of Western Europe, with a wealth of natural resources and in particular a flourishing oil and gas industry. The country plans to produce 83 million tons of oil, 41 billion cubic meters of gas, as well as to process 14.7 million tons of oil in 2014. These industries are huge and the potential to break into the market is not to be underestimated, particularly as Kazakh companies may not always have the necessary experience and knowledge for complex oil and gas sector services. And yet most British probably have little idea of local Kazakh culture, let alone business practice and procedure. Worse still, some may be influenced by fictional comedic characters of yesteryear which portray an inaccurate and misleading image.

    So how can UK SMEs overcome such issues and seize this opportunity, without having to commit time and money to detailed research and building business relationships from scratch?

    The simplest way is to link up with a company which already has the necessary experience and knowledge. With any luck, they will also have the contacts and business relationships to get your product or service to market in the quickest time possible. Moreover, it can save potential exporters perhaps months or years of research and groundwork in getting to grips with local regulatory and tax requirement and all that may be necessary to get started. With the right advice, companies can avoid the prospect of making mistakes early in their export journey into a new country, like Kazakhstan.

    Like the idea of bringing your products or services straight to a vast new market? If so, get in touch – we have nearly twenty years of experience of running and helping business in Kazakhstan with a vast array of contacts and advice to help your SME hit the ground running! Can you afford not to make contact with Kazopp?

    Posted in: Opportunities for SMEs

  • How to begin your Export Success Story

    Posted 15/09/2014

    Often export success stories involving businesses tapping into the huge potential market in Kazakhstan cite the need to take the long term view.  Many large corporates emphasise the importance of taking time to establish local partnerships and relationships.

    Companies who have built up experience within the country place high value not only on partnerships, but also upon another virtue – patience. The volume of government regulation can appear daunting initially, especially for those without local help or experience.

    But how many SMEs can afford the time and expense involved in developing business relationships? And will it all be worth it?

    When you realise that you’re talking about a country which is geographically larger than the whole of Western Europe – a fact which alone commands attention – potential rewards are exciting. Kazakhstan has a population of 17 million people and has been led by President Nazarbayev since becoming independent of the former Soviet Union in 1991. Notwithstanding its own size, the country is dwarfed by its neighbours, China and Russia and yet scored ahead of these superpowers on its borders in a 2014 World Bank survey on the ease of doing business in various countries.

    The fact that several countries, including China, Canada and some from Western Europe continue to eye the country’s potential, attracted perhaps by the wealth of its natural resources, particularly oil and gas, speaks volumes. In addition, the government has begun to implement reforms in the energy sector and simplify regulatory requirements, for example, as to visas, which should make it even easier to do business there.

    As for the business relationships, the easiest way to get around this is to let an agent with the relevant knowledge, experience and contacts represent you, your products or services. This way any burden upon cash flow can be neatly avoided, not to mention a raft of time consuming research and business relationship building. Exports can be directed straight to the right buyer and market and with the additional advantage of accessible advice as to local business practices and procedures, there need be no sleepless nights worrying about business faux pas.

    Makes sense, right? Let us do the talking for you. What have you got to lose?

    If you’re interested in setting up exports to Kazakhstan or getting help with doing business there, get in touch.


    Posted in: Opportunities for SMEs, Recent Developments

  • Setting up in Kazakhstan – what all businesses need to know

    Posted 01/09/2014

    Business people shake hands on KZ flag

    Last month’s Somerset Chamber of Commerce magazine picked up on research by the British Chambers of Commerce which identified Kazakhstan as one of the countries perceived as providing the greatest opportunities for growth in the next five years.

    Perhaps you’ve picked up on that message too? Maybe you’re keen to move into this market, but no doubt without putting lots of cash at risk.

    Whether you’re thinking from your own perspective as an entrepreneur, or weighing the issues up with support from your board of directors, here are some of the key questions you should be asking.

    • How will you identify and contact potential customers, partners and distributors?
    • How will you obtain sales leads and opportunities?
    • How will you ensure you pre-qualify for tender opportunities, or better still, obtain direct sales?
    • How will you address the practicalities of language, business etiquette and culture?
    • Where will you obtain advice, and who will you trust to understand and protect your interests?

    If you’re thinking of taking things a step further and registering a local branch or setting up a local company to ensure you have a real presence in country:

    • How will you identify and select a local partner?
    • How will you protect your investments, assets and people?
    • How will you obtain visas, work permits, licences and other operational requirements?
    • How will you get money out of Kazakhstan, and what taxes will apply?
    • How will you ensure that management / overhead costs are allowed against local taxes?

    It’s more crucial than ever that your investment is of demonstrable benefit to the local economy. As with other countries in the region, the government are increasingly promoting the importance of “local content”. So you’ll need to understand:

    • What constitutes “local content” in relation to business ownership, staffing, purchasing and manufacturing.
    • How can you maximise local content while bringing in outside investment, assets and people.

    If you’re already doing business in Kazakhstan, why not share your experiences with us via twitter.

    Alternatively, if you’re just starting out in Kazakhstan, let us know if you are looking for opportunities, local delivery partners or professional tax advice. We’ll be happy to talk to you.


    Posted in: Opportunities for SMEs, Recent Developments

  • Pushing to New Export Markets?

    Posted 28/08/2014

    Successful exporting is often about knowing where and how to tap into demand for your products and services. Choosing the right international market is crucial to your success, whether your company is just starting out in export or already a seasoned exporter.

    So where do you start?

    Map with yellow pin

    Thorough market research is vital before you launch into doing business in a new country. It’s not only about finding a country where demand for your exports will be high – understanding the market will be just as important if you are to get your market entry strategy right.

    How to assess overseas market risks

    Research into potential export markets should include careful analysis of any:

    • Business risk – how will you avoid the pitfalls of a different business and social culture? Knowledge of local custom and practice will help you to avoid causing offence, misunderstandings and delay.
    • Legal or regulatory risk – what difficulties might arise from doing business under an unfamiliar legal or regulatory framework and dealing with different regulatory bodies?
    • Political risk – how stable is the market politically, economically and socially.

    Not only can the cost of such international research mount up, it also requires significant investment in terms of time – a resource which is often in short supply in the SME sector. How many business owners have time to travel to other countries to find out how local business operates? Not to mention the strain such enquiries could place on cash flow. Whilst government assistance may initially be available through UKTI, more detailed knowledge about an overseas market may be harder to come by without some form of partnership with an agent or company with the right knowledge and experience.

    This is where specialist companies like Kazopp can be invaluable. We can help by guiding your SME to where the potential demand is and working with you to facilitate your route into exports to Kazakhstan. We’ve already done the leg work in country and have built up knowledge, experience and most importantly, the business contacts and relationships which can give SMEs new to the country a head start.

    If you’re interested in starting or expanding your export portfolio, then get in contact with us.


    Posted in: Opportunities for SMEs