As Australia’s economy continues to diversify with significant growth in the education, tourism, and technology services sectors, the opportunities for small businesses to take their expertise overseas is increasing.
Technology services exporters have been making the most of these opportunities, one such example being the start-up BroadSource.
Their export journey provides key insights for other tech-start-ups looking to tap into foreign markets. From humble beginnings in Melbourne the company now installs mega-systems for business teams on shared screens in the public and private sectors in Asia, Europe and North America.
Protecting your IP
Technology services firms rely on innovative ideas to gain a competitive advantage for the global stage. IP is often a company’s most valuable asset. That is a good reason for small-business owners to worry about whether their IP will be stolen by companies outside of Australia.
While protecting IP sounds like a daunting task, small businesses can protect themselves by understanding the risks and putting in place the appropriate safeguards.
In BroadSource’s case, the company brought in US patent attorneys to ensure their IP was protected. While attorneys can be expensive, it is worth the investment to ensure your ideas and work aren’t stolen by a rival.
It is important that companies understand that while a new business may protect its IP in Australia, this generally provides no protection beyond Australian borders. Also, recognise that third parties may want to reverse engineer and copy products, and conversely, small businesses should understand the pitfalls of breaching another company’s IP.
Small businesses should not be discouraged from entering another market simply because of concerns around patents. Understand that IP is just another aspect of trading in new markets, and it can be mitigated against – just like any other business risk.
Access to finance
For technology service companies with high margins, the most common barrier to exporting to international markets is acquiring the finance required to employ more people and expand business operations for such growth.
In the case of BroadSource, the company needed additional working capital to support its rapidly expanding pipeline of export contracts.
“Often a deal can take 12 months to complete, with payment terms from many large providers being three to four months,” says Haydn Faltyn, co-founder and CEO of BroadSource.
Whether you need to hire more employees or buy more equipment to expand your operations, small businesses need to be aware of the requirements for expansion, which requires adequate funding.
The road ahead
The opportunities for Australian tech-focused firms are greater than ever. By taking the time to understand the risks around intellectual property and the finance required to support your export expansion plans, your launch into a new market will be more organised and effective.
Andrew Watson, Executive Director – Export Finance, Efic