Following a year that saw the UK vote to leave the European Union and the rise of protectionist views, it’s really encouraging to know UK SMEs are still looking to achieve international business growth to expand their organisations.
While optimism and a positive attitude are both good starting points, there are some essential elements SMEs must consider when embarking on international business growth.
Don’t assume that what works in the UK will work in other countries. For example, health and safety regulations differ hugely from market to market. They’re a mine-field in the UK, but just because you’re clued up on the rules on British soil, it doesn’t mean they will be the same in every market.
Similarly, cultural habits differ across the globe. For example, shaking hands may be acceptable in some places, but frowned upon in others. Assuming that British culture will translate could automatically put SME owners on the back-foot.
(2) Key markets
It is vital SMEs identify where key markets are before starting the international business growth journey. It’s important to thoroughly research exactly where demand for your products and services sits before making any decisions.
Some businesses jump in too quickly and start exporting to the wrong countries altogether, and risk missing out on larger growth opportunities by not assessing other markets that could offer better returns or more substantial growth
Consider language barriers. Those expanding overseas should look to cater for all of their potential new business partners, rather than assuming everyone speaks English.
Hiring a professional translator to internationalise your website is a good starting point, and when traveling overseas business owners should always carry a business card printed in the native language. It’s also worth attempting to learn some of the basics in the new language to ensure nothing is lost in translation.
(4) Exchange rates
Make sure you fully understand the exchange rate, and how these can potentially impact your business’ bottom line.
Currencies fluctuate hugely from day to day, and can move in and out your favour dramatically over the course of the month. Locking in exchange rates by taking out a forward contract can mitigate the risk of exchange rate changes
Have the correct licences and documentation lined up. There is a huge amount of documentation which needs to be obtained from the UK to export, and most markets will require a separate licence to export their goods.
Seeking out professional advice and guidance will make sure nothing is missed and exporters are not at risk of breaking international exporting law.
While there is a lot of political and economic speculation going on at the moment, it is important to keep calm and carry on trading. UK SMEs will no doubt start planning for mid-2019, when the UK is expected to formally leave the EU.
While there are likely to be changes and new processes to manage when this comes around, it is important to remember despite this uncertainty, the UK’s number one trading partner is the US and nothing has changed overnight.
We know from research that “Brand Britain” commands a premium from overseas buyers- businesses can therefore look for opportunities that come with this change to build on new and existing trading relationships overseas.
Steve Childs is head of Business Banking International at Barclays