Time to Go Global
April 17, 2018
Small to medium-sized businesses are notoriously reluctant to explore international markets, but it could be the key to their success.
International trade used to be regarded as the province of only large, long-established manufacturing companies but now a huge range of businesses across a wide range of sectors are finding their place in exporting helped by e-commerce, expansion of the internet and the wealth of specialist private and public sector support.
The first question to answer is ‘Why export?’ The short answer is that it’ll make your company more robust in every way.
There is a World of opportunity. To put the prospect of exporting overseas in 2018 into context: the UK only accounts for 0.87% of global population. This means that UK businesses that do not export abroad are missing out on reaching the remaining 99.13% of the world’s population.
Several years ago a comprehensive study was done that showed that exporters tend to grow 22 percent faster than non-exporting companies, that they have higher profits, and that they stay in business longer. “By trading their goods and services internationally the typical exporting SME adds over £287,000 in revenue over 12 months with 9% of these also saying that exports boost their profits by more than 20%.” Centre for Economics & Business Research. Increased demand delivers economies of scale, lower unit costs and higher profits that would be impossible to achieve in the domestic market alone.
Spreading customers across several markets helps to spread business risk. If UK demand plateaus, businesses with a global presence are more protected and enjoy longer product lifecycles. A product that may be nearing obsolescence here in the UK, may still have demand in South America for example. Seasonal businesses can introduce their products to markets to consume them during periods of low demand in the domestic market.
Ultimately, by really identifying what export can deliver to you, you can shape and steer the business to realise those things. For example, if you identify “seasonal offset” is one of your reasons for trading overseas then you can smooth out seasonal fluctuation by actively seeking territories where the weather is appropriate all year, if cash flow is a challenge in the business you can create an international business model where you get paid up front. In short, your reasons for export can form a highly effective basis on which you shape your international strategies.
And if exporting opportunities weren’t quite in the spotlight before, with sterling’s depreciation they certainly are now. British goods and services are more attractive than ever – and there’s a host of markets ready and waiting to buy them.
If you are interested in exporting, North & Western Lancashire Chamber of Commerce International Trade Department can make your exporting journey easier. From getting started, selecting the right market, reaching customers, accessing finance and providing the correct documentation, NWLCC provides expert advice and guidance at every step of the way.
If you would like to discuss this blog in more detail, please contact Kirsty Jones who is the International Trade Development Officer at the North and Western Lancashire Chamber of Commerce on 01772 653000 or email her at firstname.lastname@example.org