Now the UK has fully transitioned from the EU many SMEs are understandably looking to global export markets to expand and strengthen their businesses as the dust settles on the new trading arrangement with Europe.
Unsurprisingly, much has been made about the necessity of securing trade deals – but this should not be the only factor for entrepreneurs thinking of exporting goods and services overseas, argues Liam Smyth, Director of Trade with the British Chambers of Commerce
“The reality is that we ultimately had trading agreements with 64 countries via the EU, yet in 2019 UK traders actually exported to 192 countries, including the US – one of our biggest markets despite having no trade agreement1."
While international agreements help reduce trade barriers, Liam says that when considering exporting to non-EU countries, the starting point is market opportunity. “Having worked out the value proposition for your product or service, you need to identify the best market that will enable you to move fast and grow.
“Part of that is about identifying how easy it will be to sell your products and find a market in a particular country. You need to understand its business culture, local competitors and what makes your product unique and ease of ‘repatriating’ profits and making investments. Other key factors are access to a good supply of local talent with appropriate skills and expertise, effective communications and technology, and rules on ‘local content’.
While opportunities are market and sector dependent, Liam believes there remains great potential for the UK‘s SME exporters in the US under its new more outward-focused administration. Other vibrant markets include an increasingly economically liberal India, and African countries already trading with the UK.
And he predicts there could be strong demand for UK companies operating in food and drink, advanced manufacturing, engineering, technology, and professional and financial services.
Networking and advice
Liam advises: “Before deciding your market, exploit your LinkedIn and other networks to make contacts with business people from the UK, preferably from your sector, for dispassionate advice and inside knowledge about operating ‘on the ground’ in your target geography.
“Consider consulting with professional advisors and utilising the excellent export-related resources and expertise provided by the Department for Trade & Industry (DiT), and organisations like British Chambers of Commerce that can help with tricky trading paperwork.”
Demystifying trading fears
Entrepreneur Nick Devine is founder and Managing Director of JS3 Global, an SME helping businesses across the world to implement Enterprise Resource Planning (ERP) solutions.
For him, the emerging economies of South America, the Gulf States, Indonesia and Vietnam offer great exporting possibilities for UK entrepreneurs, who should take advantage of their nation’s global reputation for knowledge, services and advanced manufacturing expertise.
“However, there’s a need to demystify fears over trading overseas,” he says. “The global market has become much closer and more aligned in its business practices and it’s now easier to work in other countries, that are actually very open to British companies.
“Language doesn’t need to be a barrier – decision makers in most countries tend to speak English or will endeavour to do so. Social media has made international networking with potential overseas business partners possible for even the smallest start-ups. Take advantage of that and visit the potential markets and contacts you’ve made, pandemic restrictions permitting.”
He adds: “Logistically, SMEs should lean on technology to help them establish and manage robust supply chains with new, non-EU trade partners."
Lastly, he advises SMEs to set up a central, international, multilingual website along with ‘local’ websites in each country they operate in.
“This will raise your company’s profile and google ranking, generating more attention from potential clients, customers, suppliers and partners in your overseas markets.”
1. Annual report on the implememtation of EU trade agreements, European Commission, 12 November 2020
The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.