More than 70 Business owners attended the recent Bournemouth Backing Your Ambition event, held by Lloyds Bank Commercial Banking to discuss topics such as international trade.
Unlike their other English city counterparts, such as Bradford, 60% of SME’s in Bournemouth are not exporting and are thus not growing as much as their competitors.
On the other hand, with the few Bournemouth businesses that are exporting, 29% expected that within the next two years, they would have created an average of up to 10 new jobs.
What are British SMEs scared of?
Each individual business will have their own reason, but for the majority it’s safe to assume that the fear of taking that business risk in to an unknown location is something that holds them back. Especially when you hear of failures from other businesses venturing out. Doing business where you are not that familiar with the culture, language and economic, political and social identity of that nation is frankly, scary.
A recent survey was carried out by the Western Union Business Solutions International Trade Monitor (ITM) of more than 1,000 UK SMEs that do international trade. The results were interesting.
According to ITM, SME’s main top concerns are:
- 64% – Overall health of the economy.
- 60% – Cash flow.
- 60% – Cheaper competitors.
- 56% – Currency volatility.
- 53% – International regulation and compliance
- 41% – Political influence, up from 32% in the previous quarter. Fear of political instability has grown in the run up to the General Elections.
Making the right decision
When it comes to international trade, many business owners say its advice they need – they already know the benefits and don’t need this regurgitated to them. Below is some guidance if you are looking for a place to start.
Do your market research. Get as much information as you can about the market you are targeting. You can do this by participating in overseas events and trade fairs and finding out who your potential customers are. Understand the value of your product and why your target market would desire it. This is an excellent way for you to test the market first and understand who your competitors are.
Network. You never know who you could meet that could help or inspire you. Learn from those that have achieved what you want.
Get support. For those businesses that were successful in exporting, many of them claimed that what made them come to this decision was finding the right person to represent their organisation abroad. Build local contacts in the country you are targeting which you can do in the ways mentioned in the points above. You can even use platforms such as LinkedIn to help you connect. There are also plenty of British organisations that advise businesses that want to do overseas trade such as UKTI, UKEF, OMIS, BExA, The Intellectual Property Office, Chambers of Commerce and there are helpful fact sheets provided by HMRC. Speak to your lawyers and accountants for their advice. You could even recruit new people that have the correct knowledge and experience.
Explore avenues of entering into this foreign market. Is it through e-commerce, through a joint-venture or through agents and distributors?
Localise your Sales and Marketing to attract new business. Understanding cultural attitude and language is absolutely vital. Geting help from the right translation agency that understand about localisation and transcreation will help you immensely. Also while there is the traditional style of marketing, it might be worth broadening your horizons and looking in to newer methods such as social media marketing. Keep in mind certain social media sites are more popular in some countries than in others.
Protect your Intellectual Property. When going abroad, learn how to protect your trade mark, patent, design and copyright.
Understand your finances. Manage currency risks, ensure payment and protect yourself from non-payment. Risk management strategies are smart in these situations and so are currency hedging tools which help you manage revenue streams.
Also something has to be said for patience and dedication. Deciding to open your businesses borders is a big step for anybody and it won’t happen overnight. Doing your homework, taking calculated risks and having the right people on board all add to the recipe for success.
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