By Daniel Hunter
A new report published by Regus, the world’s largest provider of flexible workspaces, shows that UK firms trading internationally are two fifths more likely to increase profits than those sticking to the domestic market.
Based on a 3000-strong poll of senior managers and company owners, the report found that 45% of exporters have increased their profits over the last 12 months compared with 31% of companies that trade domestically.
62% of businesses say Europe is the most profitable market for expansion, despite economic instability, followed by China (40%), North America (34%) and India (28%). A noticeably higher proportion of small businesses favour Europe (68%) and fewer are targeting China (35%).
The poll also canvassed opinion in relation to the perceived barriers to overseas trade.
Six out of ten (58%) firms says paperwork and property costs are the biggest obstacles to setting up a physical presence abroad, followed by building an image (50%) and managing local taxation and regulation (47%). Recruiting suitable staff — at both operational and senior management levels — also emerged as a significant issue for many firms.
“The Government wants UK exports to reach £1 trillion per year by 2020 and our report echoes the clear message that exporting is good for business," Steve Purdy, Managing Director of Regus, commented.
“We see the findings of this report reflected every day in the changing profile of our customer base. Our enquiry rate from UK firms for workplace support overseas is at an all-time high, especially from small firms. In our experience there is certainly an increasing desire to trade with the emerging markets.
"This demand is precisely the reason that we are continuing to expand our own presence across the globe, most recently opening in Rwanda and Cambodia for instance.
“Usually firms’ top priority is to keep operations as flexible as possible. No business owner wants to overcommit in a new market where their rate of growth and success is unpredictable. For this reason a popular approach is using a Virtual Office, giving a local presence overnight with minimal outlay and risk. Ultimately, the less time and money a company can spend on property and leases, the more it can plough into making its business a success.”
Berkshire-based Business and Facilities, a facilities management consultancy, is an example of a firm that is reaping the rewards of an international approach.
“We knew there was strong demand for our specialist services overseas from the outset of our business and we set out to take advantage of that," Mike Liddle, Managing Partner, said.
"Firstly we traded with central Europe, then expanded into Eastern Europe, the Middle East and Africa as our experience, reputation and local partner network grew.”
He believes that many UK companies sell themselves short by ignoring overseas markets.
“British skills are highly valued overseas. It is worth reassessing whether there is a market abroad for your services. Many of the traditional barriers to entry are now surmountable, especially in the area of property," he added.
Mike keeps costs to a minimum by using a combination of his clients’ premises, his own newly opened outpost in Abuja, Nigeria, and Regus business centres to create a global reach for his company.
“It’s nice to know that they have business centres in most cities I visit, such as Lagos or Riyadh. It’s a flexible, hassle-free and low-cost way of doing business. Our business has flourished on the strength of high-growth markets, which would not have been the case domestically,” he concluded.
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