When is the right time for an SME to turn to international markets to develop its business? No ‘one size fits all’ answer obviously but has there ever been a better time for a UK SME to trade internationally?
Market statistics are somewhat contradictory here – whilst we read in one article that ‘Only 16% of British SMEs consider trading internationally to boost their business’, another tells us that ‘47 per cent of SMEs have reported an increase in the export side of their business in the last year’.
But with the UK economy continuing to struggle along with virtually no growth, an SME that has cash reserves and a compelling product or service that will resonate in international markets should most definitely consider looking further afield.
Having established a solid foundation in the UK, BCSG is now actively seeking footholds in international markets; from the Republic of Ireland to the US and from South Africa to Australia, we see opportunities for us to extend our services and help small businesses across the world.
Our international strategy has been built on the following 5 key building blocks, each of which I would encourage any SME considering overseas expansion to think through carefully before launch:
Research the market: understand what you can about the size and dynamics of a market before you commit to launching there. The web is now a colossal resource on this front
Get access to local knowledge: having someone involved who knows the culture and the environment and has real expertise to guide you is critical as you set out in a new market
Check legal and tax implications: each country will have its own rules and regulations – it is important to know what you are getting into before you get too far down the track
Budget carefully and monitor performance regularly: manage your spend in line with expected / actual returns and be clear about what you are prepared to speculate on making a new market work
Make sure you have enough cash to see it through: the worst of all outcomes is to spend money trying to launch in a new market, only to run out of cash before you know whether the idea has legs – don’t over stretch the business
As well as considering these tips, it is also worth talking to UK Trade and Investment (UKTI), which reports jointly to the Foreign Office and the Department for Business, Innovation and Skills (BIS). UKTI is there to support businesses as they investigate trading overseas. They will help with researching new markets, offering introductions to potential trading partners in most territories and by offering a series of events to educate SMEs about what to expect.
So the right time to have a go or a time to consolidate in your home market? Each SME needs to decide for itself but from my perspective, developing overseas has never looked more attractive.