By Stuart Stobie, Managing Director of TNT International UK & Ireland
With over 580,000 new businesses having launched in 2014, it was a particularly strong year for the emergence of small and medium sized businesses (SMEs). In 2015, many of these new businesses are taking advantage of the great demand for quality British products across the world and are opting to export their goods to overseas markets. When taking advantage of the opportunities new markets can bring, there are several areas which businesses need to be mindful of.
What are the challenges faced by SMEs who export?
Exporting goods is a great way for SMEs to develop and grow their business and can bring with it many benefits. However many are unsure how to approach it. Researching potential new markets and opportunities requires additional planning and resources for the business involved which all needs to be done in addition to the day job. Many small business owners shy away from exporting at first because of the perceived costs of getting started, uncertainty over how to access new markets or because the export registration process seems too complex to navigate on their own.
Careful forward planning and taking advantage of the exporting resources on offer can ensure that SMEs have a greater understanding of market conditions elsewhere. The greatest challenge for many SMEs in moving from a national to an international operation is dealing with the cultural, legal and language barriers, managing extended payment terms and maintaining a healthy cash flow. It’s important that SMEs understand these challenges and know that there are organisations and initiatives which can offer support.
The rewards are there for the taking
There are plenty of benefits for those who do step into exporting. Research recently published by the British Chambers of Commerce2 highlighted that the majority of exporting firms reported an increase in sales over the last 12 months and a third of exporters had to expand their production capacity to cope with demand from international markets.
What help and advice is on offer?
There is a wealth of exporting advice available to SMEs. Other businesses who already export internationally can support the transition from a domestic to an international operation. Often a good place to start is by researching businesses you know who have been exporting for a few years; they will be well placed to offer advice based on their own experience. In addition, websites such as Export Britain share great case studies from firms who are exporting successfully. Understanding the lessons others have learnt along the way can pave the way for a smoother path into exporting.
Exporting is so essential to the recovery of the UK economy that the UK Government set a target in 2012 in to double UK exports to £1 trillion by 2020 and get 100,000 more UK companies exporting by 2020. There are a number of government initiatives including the UK Trade and Investment’s Passport to Export service which launched in 2014 as an export assessment and support programme for SMEs. It provides new or inexperienced exporters with training, planning and support to grow their business overseas and is delivered by UKTI’s regional International Trade Teams. Exporters are assigned local UKTI trade experts to work with who provide a flexible programme of support over 12 months including an action plan for export activity, workshops on the stages of exporting and help with market research into the target market.
The Institute of Export launched their Open to Export website in 2014. The site has been set up to provide SMEs with an online community where they can talk to likeminded businesses and experts to help each other become smarter and more confident doing business abroad. The programme is supported by the UKTI and the Federation of Small Businesses.
Events such as Going Global, which takes place in May and November each year, are also a great opportunity for businesses to network with experts who are able to offer valuable insight and support on how to expand internationally.