International Trade: Expand from a position of strength
COMPANIES with problems at home can be forgiven for looking to opportunities overseas to mitigate a flat domestic market.
But without the correct approach it can overstretch resource and cash flow, storing up more trouble in the long run.
Experts agree that although there is much to be gained by having a more international outlook, it has to be done properly, at the right time and for the right reasons.
Charles Jacobson, a North West international trade adviser for UK Trade and Investment (UKTI), said: “Some companies come to us because they have got problems in the UK but often that’s the worst time to come.
The options for companies looking to set up overseas are considered in more detail in a new supplement on international trade from TheBusinessDesk.com, in partnership with RSM Tenon and DLA Piper. Click here to download.
“In a macro sense it is very challenging in the North West at the moment. A company that is focused on the UK and is now seeing its market disappearing will not have an easy time overseas.”
Paul Langhorn of RSM Tenon warns that if a company is not doing well at home, adding distance won’t solve anything: “It just stretches the business and distance just adds issues. Get everything sorted at home first.”
He added that SMEs often look to export to or set up bases in English speaking countries, such as the US, first because they perhaps wrongly perceive it will be easier to do so.
By the same token, businesses should recognise that whatever the market they are entering, success and its rewards will take time to garner.
Mr Langhorn said: “Sometimes if people don’t have immediate success, there is short-termism. It’s about relationships and building those takes time.”
Charles Jacobson added: “The BRICs have been well known for a while but it takes so long to really drill into those markets that at UKTI we don’t think the UK has really got anywhere near penetration.
“We find that companies often go to a new country two or three times, take a trade mission and then if nothing happens they look elsewhere to a new market. But these markets with bigger opportunities are not all easy wins and it can take years.”
Mr Jacobson added that often, when companies do trade internationally, it is as an add-on rather than being embedded into the strategy of the business.
“Often it’s like an elastic band. So it stretches when they have the time but if they are busy in the UK it snaps back,” he said.
Click here to download our supplement on international trade in partnership with RSM Tenon and DLA Piper.
