Regardless of a company’s size, the development of exports can be a considerable accelerator of its activity. Indeed, foreign markets provide access to new clients, as well as large-scale economies and geographical diversification of sales. This is particularly vital for sectors where, in France, margins have been steadily declining in recent years. Finally, exporting is an opportunity to enrich your company with new ideas to innovate and get to know your international competitors better.
But to benefit from all these advantages, a sustainable export presence seems essential. However, many surveys reveal that French SMEs are both weak and irregular exporters. This general observation points to insufficient export preparation and a lack of resources (financial or human) due to their modest size.
In addition to the strengthened public mechanisms and highly experienced international support companies, the bank is a key partner for the long-term success of an international development strategy. Let's see together how to use the financial support and know-how provided by your banking partner by involving it in the various key stages of a structured export development project.
 

 

PREPARATION PHASE

 

This first step consists in diagnosing the company's export potential:

 

• identification of foreign markets where there is a demand for the company's products or services, analysis of competition and local distribution channels,
• necessary adaptations of products and services to meet specific demand and local regulatory constraints.
• analysis of risks to intellectual property

From this stage onwards, the Crédit Agricole Group, through its local banks (Crédit Agricole Regional Banks, LCL), can usefully collaborate with the company by relying:

• on its own knowledge of the field, regulations (e.g. foreign exchange regulations) and business practices in the various countries through its International Desks abroad*, which can also connect the company with a local network of experienced specialists (lawyers, tax specialists, etc.),
• on its partners and the regional ecosystem of export support:

Altios International* for a supervised and individualised approach to the company's project (market research, audit of the company's project, etc.),

Business France* for more general information on markets and sectors in different countries and information on local regulations.

The Export Single Desk: currently being deployed in the Regions, the purpose of the export single desks is to bring together consular actors (CCI) and Business France, under the aegis of the Regions.

The upstream exchange with the bank is also crucial in guiding the project. Indeed, it is during this phase that the expenses necessary to access the chosen market(s) (investments, prospecting expenses, etc.) must be clarified, and a financing solution must be found. It is therefore important to ensure the bank's financial support.

 

EXPORT STRATEGY DEVELOPMENT

The development of the medium-term plan, once the country or countries have been chosen, will concern both the marketing approach and the resources to be implemented:

• Choice of market penetration mode: search for an agent, distributor, online sales, need for a physical presence (office, subsidiary), search for a partner or a company to acquire, study of the most suitable logistics
• Setting objectives to be achieved
• Resource adjustments:

- human resources (in terms of staff and skills)
- construction of a medium-term financial package by optimising the use of the various forms of assistance supplemented by bank financing.

The role of the Caisse Régionale (Regional Bank) of Crédit Agricole or LCL is essential here in order to provide the company with the necessary bank financing and optimise the financial package. To do this, the Caisse Régionale of Crédit Agricole or LCL, via the International Desks in France and abroad, can rely on the complementary nature of the interventions made by Bpifrance* (risk-sharing, prospecting insurance, etc.). In addition, its partner Altios International can help the company to prepare applications for public assistance or to host/recruit employees abroad.

 

IMPLEMENTING THE STRATEGY

The implementation of the strategy will involve setting up financing, adapting products and services, as well as a commercial prospecting programme adapted to the project (search for direct clients, distributors, agents) and to the mode of market penetration chosen in advance (for example with the creation of a local entity or partnership, as is often necessary for major markets outside the European Union).
For a fast, secure and efficient implementation, the company can use the services of specialised service providers who are familiar with the field. Thus, Altios International's various offices in 16 major countries develop targeted and individualised commercial prospecting and contact follow-up programs. Altios International can also assist in the creation of subsidiaries or the search for company targets to be acquired, in collaboration with SODICA, a subsidiary of Crédit Agricole S.A. specialised in mergers and acquisitions consulting.

The Crédit Agricole Group's International Desks will help the company to collect information on its future partners (credit information, for example). These International Desks will provide operational support and field banking expertise for opening a bank account in the country of establishment (creation of an office or subsidiary) and access to remote financial flow monitoring tools. Finally, and this is far from a minor point, they will strengthen the image of companies in their new market by positioning themselves alongside their new partners (clients, banks, authorities, etc.).

 

MANAGEMENT OF EXPORT ACTIVITY

The development of foreign sales brings new risks likely to weigh on the company's cash flow and profitability. In addition, the sustainability of commercial presence on a foreign market requires a follow-up of new clients and business partners.

Through its International Desks in France and abroad, the Crédit Agricole Group offers a highly comprehensive range of financial services to protect the company against these new risks and constraints:

• for on-time payments: the advice and services offered are intended to enable payments to be made at the best possible cost and time (e.g. opening a centralised account, online sales collection services);
• for protection against the risk of non-payment: management of stand-by letters of credit, documentary credits and bank payment guarantees, export factoring(*) with credit insurance;
• for protection against currency risk: full range of currency hedging instruments, opening of foreign currency accounts;
• to finance production and payment delays: pre-export financing, supplier and buyer credit, documentary credit discount, export factoring, mobilisation of receivables from abroad, forfaiting, etc.

Finally, for companies that do not wish or cannot develop a direct commercial presence in foreign countries, our partner Altios International offers an operational commercial follow-up on site as well as the possibility of benefiting from timeshare employees.

 

CONCLUSION

While the relatively small size of French SMEs is often considered an obstacle to their international development, they can nevertheless benefit from an "ecosystem" composed of experienced public, consular and private players who help them to develop real international development strategies and limit their risks.
Among these players, the bank plays a key role, through making a financial commitment to the company because it believes in its client's internationalisation strategy. The Crédit Agricole Group, which has been strongly committed to supporting its clients' international projects for more than 20 years and is a leading European player in international trade finance (with the support of Crédit Agricole CIB*), offers a warm welcome and advice useful to the field in the main global economic centres. The Crédit Agricole Group has forged partnerships with the French leaders in international support for SMEs and midmarket companies to offer its clients the most comprehensive services possible, from France and abroad, for projects ranging from traditional exports to the establishment or acquisition of companies.

*Crédit Agricole Corporate & Investment Bank was voted "best Trade Finance Bank in Western Europe" in 2015 by the readers of the Global Trade Review.

*Crédit Agricole Group's International Desks: in France and abroad, the International Desks are international experts, the preferred contact point for companies for their internationalisation projects.

*Altios International: a partner of Crédit Agricole since 2007, Altios International is the leading French private international support group. The company offers Eurochallenge services dedicated to SMEs and midmarket company clients of Crédit Agricole's Regional Banks.

*Bpifrance: the public investment bank facilitates the financing of internationalisation projects of French SMEs and midmarket companies by commercial banks. The Crédit Agricole Group signed a partnership agreement with Bpifrance Export in 2015.

*Business France: the public agency Business France is in charge of exports and foreign investments. The Crédit Agricole Group signed a partnership agreement with Business France in 2016.

(*) with Crédit Agricole Leasing & Factoring

 

Jean-Luc Estrade,
Partnerships Manager - CACIB/ International Business Solutions Department