In the UK, the dreaded “B” word continues to take centre stage, as thousands of businesses hold their breath for the outcome of the negotiations with the European Union.
And for those British companies that export their goods to the EU member states, the path looks pretty hazy.
Figures show that 21 per cent of the UK’s small businesses export. Of these, a whopping 93 per cent sell to countries in the European Economic Area, and Brexit is leaving a huge question mark over the future of these trade relationships.
But despite the uncertainty, exporting is going to be crucial to the success of businesses, and therefore has a big part to play in the health of our entire economy.
If your business is flourishing in the UK, there’s no reason why you shouldn’t consider exporting.
Admittedly it takes a brave business owner to do so, but for companies in certain types of industries, such as machinery and food, selling overseas could be a really positive step. Just look at British exports of gin, which hit almost £500m last year, rising 32 per cent in the last five years.
Peter Alderson, managing director of business finance providers White Oak UK comments:
“With UK government indicating a desire to double exports by 2020, international sales should on the radar for any small businesses and as we move through 2018, this could present some exciting opportunities for those businesses with a bold growth ambition.”
According to the Federation of Small Businesses, SMEs broadly fit into three categories.
Strategic businesses factor exports into their strategy from the start, largely because they are limited in how far they can take their offering in their original markets.
Opportunistic types take advantage of opportunities, such as expanding overseas, despite the fact that this wasn’t part of their initial business plan.
And reactive companies respond to demand from foreign customers, rather than having a specific target in mind.
Unsurprisingly, it’s usually those proactive businesses that are usually the most successful in foreign markets, largely because they have taken the time to consider their approach and prepare appropriately.
If you wanted to sell abroad, your first port of call is likely to be the British Chambers of Commerce. The BCC can determine whether your products and services have potential in overseas markets, while also examining whether you are in a position to grow.
UK Trade and Investment also has a range of services on offer, including international trade shows, which give businesses the opportunity to connect.
Back in 2016, the Department for International Trade launched a platform, great.gov.uk, to help businesses get ready to sell on the global stage. The platform comes with tools designed to support companies on their export journey, such as creating a trade profile that connects UK suppliers with prospective overseas buyers.
But of course expanding your offering outside of the UK requires investment. One way of getting access to funding from high street banks is through credit agency UK Export Finance. But there are plenty of other ways to finance your project. If you have a clear and ambitious plan to branch out abroad, it’s worth approaching lenders in the alternative finance space.
Peter Alderson, managing director of business finance providers White Oak UK says:
“For businesses considering exporting, understanding finance options available is key, especially if capital is required to support this increased output.
Alternative finance can support a number of areas, from covering the cost of new essential equipment and technology, to recruitment and working capital.”
However, the White Oak UK boss points out that the level of awareness among businesses about how to access finance still remains low. According to the Department for Business, Energy and Industrial Strategy, just 14 per cent of SMEs know where to go to source the right funding.
“That’s a statistic that needs some real work as export appetite ramps up,” Alderson adds.
Tapping into foreign markets doesn’t come without its challenges, but that doesn’t mean you shouldn’t broaden your horizons.