Small- and medium-sized businesses in the U.K. need to “start moving out of their comfort zone” by tapping international markets, writes Maggie Choo, Alibaba.com’s general manager for Europe, the Middle East and Africa. In an article for U.K.-based SME Web, Choo argues that the weakness of the pound and the strength of emerging markets make exporting an attractive proposition.
A survey conducted last year by Alibaba.com showed that about 80% of U.K. SMEs looked no further than the British Isles for business, sourcing all supplies domestically and selling only at home. About one in four business owners and managers said their companies were too small to trade abroad; 21% cited cultural and language barriers and 24% cited trust issues as reasons for avoiding international trade. However, Alibaba.com statistics indicate the U.K.’s sluggish economy may be tempting more businesses to venture overseas. The number of U.K.members registered on the global trading website grew 49 percent last yearto 988,000.]
Choo offered these tipsto international traders:
- Embrace differences: Many people worry about the cultural issues involved when working with a company based in a different country. It’s always wise to be sensitive to cultural differences, but don’t let those differences put you off getting in touch.
- Get your finances straight: Get specialist advice on the financial aspects/tax implications of importing and exporting and make sure this is factored into the price you can afford to pay/charge. Be sure to clearly agree on payment terms before any transaction takes place.
- Know your exchange rates: The depreciation of sterling has boosted exporters’ profits as firms have not passed all of the fall in the pound on to their buyers. This remains a good reason for firms to enter the U.K. export market. According to the Treasury, the corporate tax measures introduced in the emergency budget and the subsequent release of resources from the government should further support supply-side activity.
- Safety first: As you would when dealing with any new business contact, do some research. Check the background of the company. Are they members of a trade association or do they have any kind of verification/certification for the products they are developing? Do a credit check. Are they happy for you to speak to references? Beware of companies who just have a P.O. box or where the phone always goes to voicemail during the country’s standard working hours–bear in mind you may have to get up during the night to try this!
- Make a plan to get your goods where they need to go: Factor in the time needed to export and plan accordingly. Don’t overpromise. You could consider working with an export professional to manage the process for you, especially if this is something you intend to start doing more frequently. Ensure either you or your supply chain partner has insurance in place to cover the goods while they are in transit.