With the British Chambers of Commerce raising the GDP forecast for 2018 from 1.1% to 1.4%, things are looking positive for many SMEs. A poll of 500 SMEs from Wesleyan Bank shows that 65% anticipate achieving growth of up to 40% over the next two years with only 11% stating they were concerned about the potential impact of Brexit.
In fact, many businesses are reportedly looking overseas markets to fuel growth. Separate research from CitySprint (referenced here) reports that 1.3 million UK SMES plan to fuel growth with overseas business over the next year, that represents one quarter of SMEs with overseas growth on their agenda. Are you preparing for global growth?
The fact more elements of trade transactions are moving online provides a huge opportunity for businesses to save on the costs of overseas sales, whether you plan to sell directly to overseas customers from a website or not. As we move aspects of trading online, many tasks become quicker, cheaper and easier to perform. A 2017 ICC Banking Commission report estimated that eliminating paper from trade transactions could reduce the cost of trading compliance by 30 per cent, along with benefits such as faster processing. Are you ready to take advantage? Is your company set up for digital trading and do you have the skills in your midst to handle it? Do you have the technology in place to make trading overseas easier? If you’d like to sell direct to customers overseas but don’t have a website, could you test the market by selling on worldwide platforms such as Etsy, Amazon and eBay first?
Sometimes it’s hard to know where to target next. Putting a strategy in place for export rollout is fundamental for success and it does take research and planning. You’ll find some great tools on the government website www.great.gov.uk including tools for creating an exporter profile, searching out suitable online marketplaces and tips for ensuring you’re ready to meet the demand and expectations of overseas trading. You can also explore markets and build relationships with potential customers by attending trade shows and you may be able to access government grants in able to do this. For smaller businesses it can seem like a big leap to start trading outside of your home country, but having the market research, costing and business plans in place to help you take that leap will give you more confidence and a far better chance of success.
As your business grows, it’s likely you may need new talent, premises, materials, and maybe even equipment in order to help meet demand and successfully secure contracts. Unfortunately, business loans can still be hard to come by in the UK, even with a solid business and exporting model in place. SMEs are increasingly looking to alternative finance to bridge the gap and ensure they don’t miss out on taking their goods and services into the global marketplace.
According to UK Finance, the number of SMEs using invoice finance services to fuel export goals is increasing. If you’ve not considered this financing method before, it can be a useful tool for maintaining consistent cash flow or advancing much needed investment funds. So, how does it work? Invoice discounting firms advance you an agreed percentage based on upcoming invoices, releasing the funds to you before your client pays so that you are able to use the money when you need it. Providing you have a healthy sales ledger, you can use your current sales to help you reach new markets.
Another alternative is to seek investment funding. If you’d like some extra support in taking your product to new markets, you could consider looking for an angel investor with significant export experience. This way, you could benefit from the voice of experience in guiding your next steps and developing your export plan along with accessing additional funds to put them into action. You may also gain access to useful contacts and suppliers. However, you’ll need to be willing to accept criticism and listen to others in order for such a relationship to work, which can be tricky when you’ve grown your business alone up to this point.
If you’ve been bracing yourself for the impact of Brexit and are now daring to dream that the coming months could actually present more outside trade opportunities for your business, don’t waste time in taking your next steps. Where will your goods and services go next?