How can North East businesses looking to trade overseas for the first time do so successfully?
Leigh Taylor, Regional director for the North East, SME, at Lloyds Bank, gives his top tips on implementing an export strategy for the first time.
- Explore your options now The sooner businesses start exploring how exporting can benefit them, the sooner they can put measures in place to make it happen.
- Research your target market While this may be clear for some businesses, others may need direction establishing the best overseas opportunities. Partners such as the Department for International Trade (DIT) can help map out an export strategy. Lloyds Bank’s International Trade Portal helps customers understand the market position, build relationships, assess the costs and find new exporting opportunities: http://resources.lloydsbank.com/international-trade-portal/
- Talk to others Contact your local Chamber of Commerce – this can be the easiest way of avoiding any unwanted pitfalls and means you can learn from the experiences of other local businesses.
- Know your destination Different economies have different cultures, languages and laws. It is essential to do research and ensure you know how businesses in overseas markets operate. Having a trusted adviser that can point you in the right direction is invaluable when building on-the-ground relationships.
- Brexit prospects While there is still uncertainty around the outcome of the ongoing Brexit negotiations, businesses still have access to EU’s single market. Meanwhile, with the pound remaining depreciated compared with other currencies outside the eurozone, UK goods and services are currently competitively priced, making them more attractive to overseas buyers.
- Make sure you’re protected One of the main exporting challenges is the uncertainty of the exchange rate. Trade finance can help businesses to manage this risk and can be a valuable source of working capital. This means working with an experienced team to understand all exporting requirements and finding the best finance solution to successfully deal with international suppliers and customers.
- Map out your strategy Creating an in-depth plan which lays out how you are going to grow your overseas operations at a manageable rate is essential. Doing so minimises the risk of under-trading, which can leave a business with insufficient working capital to meet day-to-day costs.
- Manage your working capital Businesses that export can often face longer delays getting paid. Managing your cashflow by using products such as invoice finance can help mitigate any uncertainty as you enter into new trade agreements.
- Take advice International trade always involves challenges. Specialist advisers such as the Department for International Trade can help firms deal with these issues and offer support.
- Take advantage Some 41 per cent of North East firms now export and 20 per cent of exporters expect their overseas sales to increase over the next six months. Take advice, prepare and reap the benefits involved when trading to new markets across the world.