(1) With currency depreciation set to continue, businesses must act now to mitigate risksIn a study by American Express FX International Payments, over one third of UK SME bosses trading internationally cited ?currency fluctuations? as their top concern when conducting business overseas. ?Given the relative strength of the pound versus currencies such as the euro and US dollar, importing products from abroad may be cheaper than building them in the UK,? Sinclair explained. ?This is also due to the raw cost of goods and labour availability in other countries.? In the past, many SME bosses chose to focus their attention on Europe, however, largely due to the Brexit debate being in full swing, firms are now looking far beyond the EU. This was highlighted by the ?Western Union Business Solutions International Trade Monitor,? which revealed that less than half of SMEs see Europe as a primary import market, compared to 78 per cent three years ago. Britain?s key importing areas have now been deemed as China, the US and Canada. Of course, being able to import from countries you previously weren?t able to does not come without its risks. ?Business leaders may not have the resources or networks in the regions they are looking to import from,? claimed Mark Januzewski, CEO of Designer Habitat. ?It is vital that this is developed in the early stages. The ability to spend time and money visiting overseas partners may also be limited.? Other challenges may include regulations and delays in production. ?As a relationship between the SME and a seller abroad could be relatively new, the seller may demand upfront payment, meaning the buyer or importer could be faced with a 30-180 day payment gap until they receive final payment from their end customers,? added Sinclair. Read on to find out how to foster a trusting relationship with your overseas supplier.
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