By Trevor Hoyle, Managing Director of Ground Operations UK & Ireland, FedEx Express and FedEx UK
With it being Valentine’s Day, now is the perfect time to reflect on the topic of relationships: the connections and commitment people make with each other to enhance their lives.
As we know, this is also applicable to the business world, since developing new customer relationships or connections is the core ingredient for any successful business strategy.
For small to medium sized enterprises (SMEs), connections give them the ability to access untapped markets and form lasting, profitable customer relationships - all fundamental aspects of maintaining and growing a business.
Thanks to the rapid spread of the internet and e-commerce, everyone nowadays has the potential to be an SME owner and so the competition has never been fiercer. Add to this the recent economic turbulence throughout Europe and times have rarely been tougher for the sector.
With so much attention frequently focused on the big players of the business world, it is easy to forget the vital role that UK SMEs play as a global economic engine. In actual fact, SMEs continue to be one of the most powerful sources of industry growth, entrepreneurial skills, innovation and employment and their impact on the world stage should not be underestimated. In the UK, some 4.8 million SMEs provide around 23.9 million jobs and represent 99.9% of all private sector businesses, generating a combined turnover of £1,500 billion. Between them, they contribute almost half (48.8%) of all private sector turnover.
From speaking with small business owners at the recent FedEx Express SME event in London, aimed at providing advice on how to succeed in today’s market, we heard first-hand some of the challenges they faced and were able to understand their need for support when competing with larger organisations. If this highly important community is to go on thriving, it needs to consider broadening its prospects, looking further afield than ever for sources of revenue, and forming new relationships or connections as it goes.
Given the economic conditions, a trend we have increasingly been seeing is that of small businesses looking to take advantage of the huge opportunities available abroad. Indeed, a study we ran in conjunction with the Economist Intelligence Unit revealed that as UK SMEs look to grow their businesses through exporting their goods internationally, the top three export markets for them included China, Brazil and India.
In countries like these the opportunities are enormous. At FedEx we have a long history in some of the world’s most dynamic emerging markets, including over 20 years of experience in countries like China, India and Brazil, so we understand only too well the degree in which many national economies in Europe are fuelled by SMEs — the key is to put these economies within reach of them.
To tap into the emerging markets growth, UK SMEs need to be smart in identifying new trading opportunities and quickly accessing these new markets. As they don’t have the time or expertise to worry about infrastructure and delivery of products, they need to work with a reliable express transportation provider who they can trust to help them understand the challenges of cross border trading, local customer service and ultimately deliver their products on time.
An example of a UK company which formed new connections and accessed new international markets is The Cambridge Satchel Company, a small British manufacturer of leather bags. In 2008, it was a literal cottage industry, run by a mother from a house in the English county of Cambridgeshire.
Fast forward five years and the company’s bags have become the toast of the global fashion world with regular orders from places as far afield as Dubai, Kuala Lumpur and Taipei. With such a global customer base, the company can only manage as efficiently as it does thanks to its bespoke logistics solutions.
As we move further into 2013, all eyes will remain on the SME community. The European Commission has stated that supporting SMEs is one of its top priorities for economic growth, job creation and social cohesion. This is also true in the UK where the government is encouraging SME growth by bringing together in one place government finance support for small and mid-sized businesses. It is also providing a ‘growth accelerator’ service to match eligible companies with business experts to identify barriers to growth and ways to overcome these.
Overall we believe the future is bright, and thanks to the work done by the express transportation sector in business matchmaking, SMEs today have the ability to grow in ways not possible for generations of businesses in the past.
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