The Ballistic Tool Kit is a UK SME trade body which aims to help member companies succeed in the growing defence export market through furnishing specialist equipment, training and support to security, military and law enforcement customers across the globe. Here, Paul Everington, Chairman of the BTK and Managing Director of MS Instruments plc, tells MOD DCB about the activities, aims and ambitions of the organisation.
The Ballistic Tool Kit (BTK) was formed in 2006 to address the growing need from overseas customers for more specialised and integrated defence solutions, and to enable its members to reach a growing export market. The BTK is now around 40-strong, formed of small and medium-sized UK companies in the defence and security sector.
Small companies are known for their flexibility, expertise, dedication and ability to create new, innovative and niche products. However, it is not always possible for these small firms to easily access the export market or navigate their way around the many, but necessary, export control requirements. Through membership of a cooperative such as BTK, these companies can talk to other like-minded companies to exchange information and learn. The BTK facilitates this and we all feed off each other’s experiences, which helps us to gain a better insight into markets as well as generating business for one another. By pooling resources and working together, small companies have the skills and marketing potential to have as great an impact as the larger companies in the highly competitive field of defence and security sales.
To be successful in exporting, it is not just about having a great product. Increasingly, the UK, while being recognised as offering some of the best quality products in the world, is seen as more expensive than its competitors across the globe. To offset this it is important for UK companies to add value where other providers do not, without increasing their price. As well as offering products, it is important for SMEs to be able to integrate them into their customers’ portfolio, as well as providing genuine through-life support.
Cooperation is vital here for SMEs. As MD of a small company myself, I recognise that SMEs cannot afford to have offices and facilities around the world, so it is important either to work with another company or to appoint an overseas agent to provide that support. Within BTK, we share information on agents and in-country representation for our members, and SMEs in other sectors should look seriously at forming similar groups within their own sectors to support each other. My own company is helping another BTK member by ‘priming’ its bid into India, where they are new to that market but where we have established a good level of business. That company is now using our agent/representative to help them through the Indian system.
Adding value also means educating your customer on how to work with your product, teaching them the command skills necessary to operate it in the field, and how best to employ that asset and integrate it with what is already there. Within BTK we have a number of companies who, when working together, can offer this complete package.
On one occasion, a BTK member with extensive experience of its product, but with no direct insight into the Forward Air Controllers who would benefit from its use, worked with another BTK member to gain this experience. As a result, the customer was professionally briefed by people with live service experience in how to get the best out of the supplied equipment.
Ultimately, what sells is people – the customer doesn’t just buy the product, they buy the people, and that is where SMEs perform well. UK industry historically hasn’t been good at going out and seeing the customer; however, SMEs are ideally placed to do this. When customers have any concerns, they greatly appreciate the ability to talk to the head of the company, and this is much easier with SMEs: providing the personal touch works wonders and increases trust.
Indeed, within my own company we have done just that in the last month, sending our most senior engineer to assist with the installation of a large order for a new overseas government customer. Having on hand the person who actually designed the equipment enabled us to address any minor commissioning issues immediately, rather than trying to describe what to do over the phone, with all the related language and communications problems that can arise. This service has raised our profile with the customer in a most positive way and, we are told, has put us in an excellent position when a further tender is released for similar equipment later in the year.
As well as providing reliable and fully supported equipment, training is also an important part of the package. Whether it is how to maintain or service the goods or how to use them on the battlefield, it is important that this is not overlooked. There is little point in having the best product in the world if your customer does not know how to use it, handle it or incorporate it into their system properly. Very recently, another BTK member won some significant business on the back of being able to offer both MS Instruments systems and other members’ design and training expertise to provide a comprehensive package for his customer.
However, we in BTK recognise that we cannot do all of this on our own, even with some 40 partner companies. We have found that there are a number of organisations and institutions with whom you should establish a relationship in order to help you win and maintain new business.
Firstly, SMEs can, and should, have a good relationship with Government. Support from the UK is immensely important and should not be underestimated. UKTI’s Defence & Security Organisation (DSO) Small Business Unit (SBU) is there to assist any UK SME with any aspect of improving its business prospects. We have found UKTI DSO to be an invaluable tool in the export market that can help with advice on specific countries, export licensing and clearances issues and, if necessary, can intervene on your behalf in the event of any dispute with your customer. While BTK may be able to find solutions for many problems from within, we work closely with UKTI DSO at all stages; any company looking to export defence or security equipment should engage with them. However, they can only help if they are kept fully informed, so it is important to keep them advised of your intentions and how things are progressing from the outset. That way they can, if necessary, advise or act on your behalf, whether it is a simple export licensing issue or a major dispute with your customer.
Secondly, the UK military has an excellent reputation throughout the world, and UK industry should look to exploit this as much as possible. UKTI DSO’s Export Support Team (EST), while being relatively small, is an excellent resource that is underused by SMEs. From simply providing a soldier for publicity shots, through to a uniformed presence on a stand at an exhibition up to evaluating a product and providing an honest opinion of it, the EST can, and does, help to give you that winning edge. Every member of the team is a serving soldier with current expertise and most have seen recent active service, so any advice they provide to you or your customer is as up to date as it can be.
Thirdly, your local Chamber of Commerce is an inexpensive but valuable source of assistance. As with BTK, you can exchange views and information at some of their business networking events; from my perspective, however, it is the assistance they can provide when trying to process letters of credit, along with all of the associated small print therein, that is most valuable. It is easy to miss the requirement for a particular certificate or legalisation of a document; your local Chamber can not only highlight the problem, but in most cases also issue the necessary documents on your behalf.
Finally, both from a BTK perspective and from my own experiences, one thing that is important when looking to export is to have a good relationship with your bank. While that may sound obvious, many SMEs do not ensure that the necessary funding is available to complete not just a current order, but also the one immediately after. While there may be an overdraft facility, it is quite often forgotten that a customer won’t pay until everything has been delivered and working properly. Even then, there may be delays in receiving payment, particularly when dealing with foreign finance institutions. That payment might be vital in helping to pay for components for the next order on which you are already starting work. The bank is also essential when expanding your business into countries like India, which require Earnest Money Deposits and Performance and Warranty Bonds. You can have up to 23% of the contract value tied up in bonds unless you plan suitably with the bank.
One more thing: SMEs are great, but large companies do have access to business opportunities that SMEs may not. Don’t be too proud to work with the Primes as well!
For further information on the Ballistic Tool Kit, contact: paul.everington@msinstruments.co.uk