zones are irrelevant when using online customer service tools and keeping in touch is a breeze with free conference calling and project management software. The technology is now at our fingertips, making sales and communication possible whether you’re in Bangor or Bangalore, York or New York.
“Increasingly, small businesses do not start off trading locally as they did in the past. If you have a website you can think globally from the beginning.”
– Clive Lewis, head of enterprise, Institute of Chartered Accountants for England and Wales
5. Political will
Political leaders across the globe are setting goals on exports and international trade.
In March 2010, in his state of the union address, US President Barack Obama unveiled the National Export Initiative and announced a target to double exports from the US by 2015:
“The National Export Initiative will help meet my administration’s goal of doubling exports over the next five years by working to remove trade barriers abroad, by helping firms – especially small businesses – overcome the hurdles to entering new export markets, by assisting with financing, and in general by pursuing a government-wide approach to export advocacy abroad.”
In Europe, Viviane Reding, EU commissioner for information society and media, has called for a digital single market as a top priority, saying:
“We won’t have a real digital economy until we remove all barriers to online transactions, also for end-consumers. This must be on top of the list of all policy initiatives to relaunch the single market project.”
And back in the UK, the prime minister and foreign secretary stand firmly behind export as a policy to improve the country’s economic wellbeing and social standing. This is reflected in David Cameron’s early trade visits to the US, Turkey and India, as well as comments from William Hague on Britain’s place in a networked world.
As a new government, we are absolutely focused on reopening Britain for business. We want to make Britain the best possible place to invest in and to trade with.
– David Cameron, during a visit to the US, July 2010
Fine words from politicians and we welcome seeing them put into practice!
6. Broadened horizons
Doing business overseas is not necessarily all about business. Through trade connections you meet people with whom you may not ordinarily have come across and travel to places you may not have thought to visit.
Ensure you choose a territory that is right for your offer but, importantly, one that you like. Hopefully, you will be spending a lot of time there.
– Christine Losecaat, managing director of Little Dipper and chair of UK China Partners
In the process of growing your business, there is a chance to learn new languages, discover lost cultures and eat surprising delicacies. Consider business as the magic carpet that will carry you to adventures in far-off countries, steeped in commercial and cultural opportunity.
Crisis of confidence
The reasons laid out for going global are good ones, and yet despite growing markets, ease of access, political will and the opportunity to broaden horizons, out of a base of 4.5 million-plus small businesses in the UK, only 75,000 are currently exporting.
I believe the figure is low on account of a crisis of confidence.
This is reflected in many surveys that show a high number of business owners who want to export but are deterred by perceived business barriers.
The HSBC ‘Going International’ report claims millions of small businesses are unduly sceptical about the importance of international trade. Four-in-ten businesses contemplating international trade see it as potentially crucial to their overall survival, but this number rises to nearly nine-in-ten for those with experience of already trading overseas. Companies that have the confidence to sell abroad are reaping the rewards, with four-in-five saying they consider it to be a profitable venture. 78% of these businesses having grown as a direct consequence.
There’s also what Noel Quin, HSBC’s UK head of commercial banking, calls a “psychological barrier”:
“The reality of setting up overseas trading deals was perceived as more costly and problematic by potential exporters than was actually the experience of those that already exported. The benefits [of exporting] far outweigh the costs when you start to do it.”
Another high street bank, Lloyds TSB Commercial, commissioned similar research and came out with similar results. ‘British Businesses Missing a Trick in Export Markets’ ran the headline, with the facts as follows:
62% of SME [small to medium-sized enterprise] exporters have experienced growth in foreign markets in the last 12 months.
39% of businesses not currently exporting say fearing a lack of demand is the main reason for not doing so.
21% cite worries about late payments as a reason for not exporting.
“By far the biggest concern amongst small businesses questioned was that there would not be demand for their product or service overseas. And yet, amongst firms that are exporting, overseas trade is contributing to a growing proportion of company turnover with almost nine out of ten believing exports as a percentage of turnover will increase this year, or at least stay at current levels.”
This crisis of confidence has been sufficiently serious for trade Ministers and representatives to step up to the stage and voice concern.
UK companies overestimate the barriers and underestimate the benefits of exporting. I’ve been disappointed by the fact that although we are a nation of small and medium-sized businesses, we are not yet a nation of exporters.
– Lord Davies, former minister of international trade
Business needs to rediscover the mercantile spirit that has driven our wealth in the past and now drives other, younger industrial economies.
– David Frost, director general, British Chambers of Commerce
Future economic prosperity will only come from UK companies exploiting opportunities overseas.
– Andrew Cahn, chief executive, UK Trade and Investment
The only way the UK will recover quickly and sustainably from the recession is by trading her way out. That calls for our continued, indeed our increased, commitment to the export of goods and services.
– Digby Jones, former international trade minister
There is a common thread to these protestations. It is a call to action for companies to overcome fear and take our products and services to the world.
But before we look at how to do that, let’s examine what’s holding us back.
Based on the evidence, I have come up with a list of key deterrents
