28/08/2014

By Wei Duan, Director, Alibaba.com EMEA

Today the UK is an import nation much more than it is an export one. Since the relative decline of manufacturing from the 1960s onwards, we’ve been shipping in more than we’ve been shipping out.

Things are changing, though. An economy on the cusp of recovery, a dedicated Government effort to move exporting up the agenda and a vibrant business base making everything from apps to cool kettles to video games means we’re still a great trading nation.

If you’re a big firm with stacks of resources, cash and clout, exporting is not only a no-brainer; it’s pretty easy to do too. No wonder, then, that the mantra ‘going global’ is by now well-worn.

But for smaller businesses it’s a whole different story. Greater restrictions – on people-power, on money, on access to advice and guidance, on internal buy-in – means it’s not as easy for small firms to sail away from the safe harbour of home.

That’s not to say small and medium enterprises (SMEs) don’t want to export. They do. Research from the Federation of Small Businesses (FSB) shows about a quarter (23%) of small firms export, with a further 6% of its members saying they’d like to export in future.

They just need the right combination of support, planning, access to finance and to get them there.

Why export?
The benefits of exporting are legion, but here’s 3 really important ones:

increased profit – exporting to new markets means new customers and prospects. Get it right and see a profit boost

growth and security – exporting might seem risky business, but you could argue just concentrating on the domestic market is risky too. SMEs who export are 11% more likely to survive, according to the Confederation of British Industry

extending product life – products reaching their dotage domestically can be ‘reborn’ in a brand-new market

State of play
The Government has a set a target of doubling exports to £1 trillion a year by 2020.

Looking at UK businesses of all sizes, 32% of them are exporting, according to the British Chambers of Commerce (BCC), with financial and business services among the UK’s export powerhouses.

But it’s not just the big players. A Guardian report earlier this year shone a light on smaller UK-based retail firms exporting staples like Tetley Tea and Heinz Baked Beans to British expats. And then there’s the UK’s music exports – earlier this month the Government announced a package of financial support for British groups touring overseas.

Prospects for exporting firms are good, too. New BCC research shows:

• 70% of UK exporters expect their turnover to increase in the next 12 months
• almost half of exporters (47%) have reported increases in export sales
• more than a third of exporters (35%) saw their cash flow improve in Q2 2014

But what are the challenges for small businesses?
The UK is brimming with SMEs – nearly 5 million in fact. But the UK’s export landscape is still dominated by big-hitters. Why?

Export challenges for smaller firms include:

Access to finance
Smaller firms are still struggling to access finance. While there are finance schemes available, bodies like the FSB are concerned that enough isn’t being done to promote them.

Support, mentoring and guidance
Access to exporting advice is crucial, especially for smaller companies. The Government’s UK Trade & Investment (UKTI) arm is dedicated to helping British firms export, but there are concerns from some firms that this resource is only for big companies when it most certainly is not. In fact, UKTI is putting a lot of resource behind supporting small business.

Translation of marketing materials
Translation of website and marketing materials is important when it comes to exporting – customers need to be able to understand and read products and services.

So what should an exporting roadmap look like?

Recognise you’re not a big business
First step is to accept that you don’t have the resources enjoyed by larger firms. That doesn’t mean you can’t export though. Work with what you’ve got.

Address your skills gaps
Research from the BCC shows 1-in-5 firms feel they don’t have the in-house skills, managerial capacity and knowledge to export. So be honest about your skill gaps and fill in accordingly with freelance support or full-time hires.

Do your research
Actively get in touch with UKTI or the Department for Business, Innovation and Skills – you need to be proactive. Or speak to your local Chambers of Commerce or industry trade association. Make connections and contacts and take it from there.

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