Going global: Managing your international ambitions
PUBLISHED: 15:03 07 December 2017
The negotiations to leave the EU make it a good time for South West businesses to target new export opportunities, says David Beaumont of Lloyds Bank Commercial Banking
With Brexit on the horizon and Lloyds Bank’s recent Business in Britain report revealing that South West businesses are feeling less confident about their export prospects in Europe, looking beyond traditional and familiar international trade opportunities is crucial.
There is no doubt that questions remain over the shape of Britain’s future trade relationships with Europe and elsewhere, but with the UK’s exit from the EU set to take at least two years to negotiate, a ‘wait-and-see’ approach may not be the best option for SMEs.
It is encouraging to see South West firms determined to get on with doing what they do best – taking growth opportunities when they arise while keeping an eye on external risks.
And the opportunities are there for the taking.
Prospects and partners
Firms tell us that they still feel positive about their export prospects, thanks in part to the favourable exchange rate making their goods and services more competitive overseas.
But leaving the EU also creates longer-term opportunities in encouraging South West businesses to look further afield at countries outside Europe that could grow into lucrative export markets.
According to UK Export Finance’s 2016/17 report, companies in the South West have already secured £41 million in overseas sales in the past year. Our research shows that businesses expect exports to increase to all markets, including Europe, but most notably to Asia-Pacific, the US and Canada.
These regions provide South West businesses with fresh opportunities to grow their revenues, and a more diverse customer base can also help shield them against cycles in the domestic market.
Nevertheless, exporting presents new challenges and risks, like waiting longer to get paid, which can increase pressure on working capital.
Partnering with a bank with global trade expertise means firms can access a range of specialist funding options and working capital tools that can boost their chances of success.
Support to grow
A supportive bank can provide trade finance products to help mitigate the risks associated with trading internationally, like letters of credit and export finance.
Lloyds Bank also offers an online International Trade Portal, designed specifically to help British businesses identify and prioritise the best overseas opportunities for their products or services.
It is crucial that firms research markets before creating their export strategies and the portal can highlight potential trading partners, offer insight into trading conditions, identify public and private tender opportunities and provide market reports.
Exporting for the first time can be daunting, but the rewards it can generate are substantial.
Our work to support SME exporters is all part of our ongoing commitment to helping Britain prosper globally. This includes helping 25,000 new exporters by 2020 and in the process backing the government’s goal of getting 100,000 more businesses trading overseas by the end of the decade.
The future success of the UK economy depends on SMEs looking to overseas markets for growth, but they don’t have to go it alone.