By David Beaumont, Area Director SME Banking in the South West, Lloyds Bank Commercial Banking
As we approach the end of 2014 business surveys are presenting a mixed picture for SMEs across the UK. The Office for National Statistics stated that the UK is set to become the fastest growing G7 economy in 2014, although the Bank of England expects growth figures to slow during 2015.
As businesses explore the growth opportunities that are available it may be beneficial for them to consider opportunities beyond domestic markets.
At a recent Lloyds Bank Commercial Banking event in Bristol, which was attended by more than 100 influential business figures from across the South West, more than 45 per cent of those surveyed said that they needed to explore exporting if they were to continue growing over the coming year.
This is not an opinion held solely by businesses across the South West, with a recent report by YouGov stating that by 2016 six out of 10 SMEs expect to be exporting by 2016 - a 20% increase on current levels.
Looking to export
For companies that have never even considered it before, exporting can be a daunting prospect. It is important that businesses gain the right advice and create a thorough and clear business plan before they start to progress any new opportunities.
For many the first port of call for financial advice would be their bank, however there are also a range of services offered by organisations that address a variety of issues companies need to consider before they begin to export.
One example is the Basics of Exporting Guide offered by UK Trade and Investment, which provides financial guidance and details of respected support and mentoring agencies that can help guide SMEs through the exporting process.
The British Chamber of Commerce also works closely with business networks all over the globe to help provide face-to-face and online support to UK companies of all sizes that are looking at international trade opportunities.
The benefits and risks of exporting
There is an endless list of reasons why exporting is a positive thing for businesses. In addition to increasing sales opportunities for existing products, research has also found that exporting can expose business leaders to new ideas as well as increasing a firm’s profile and credibility.
Trading internationally also protects businesses against a certain degree of instability in the domestic market, as business that have expanded internationally often find that a dip in UK trading is offset by stronger sales overseas.
Whatever the advantages, it is vital that firms fully assess the risks before starting to export as issues such as payment delays or overtrading can be detrimental to a growing business and create cash flow issues.
While exporting overseas can offer many benefits to businesses, it is vital that companies take full advantage of the support and guidance services available in order to fully capitalise on the expansion opportunities that exporting presents.