Exporting: why no business is too small to send goods overseas

More UK companies are exporting than ever, but it shouldn't be limited to big business, according to Geoff Runcie of Morgan Goodwin.

Historically, exporting was perceived as the reserve for big businesses.

Those producing goods en-masse were more desirable for innovation (Dyson) or prestige (Land Rover). And it’s not hard to see why, when you consider the amount of goods being shipped, not to mention the cost and logistics involved.

Sending goods overseas gives the impression of a big company. It conjures up images of freight ships the size of Wales. But it’s not an invite-only club driven by size. In fact, any business serious about growth should be looking to export.

Exporting on the up?

It seems that the message is starting to hit home. According to a recent HMRC report, UK exports are at a record high. Goods exports were up 10 per cent, driven by a demand for manufactured goods, while services exports rose 4.2 per cent due to strong global interest in the UK’s financial and travel services.

Research from Barclays Corporate Banking also found that 64 per cent of consumers in India, 57 per cent in China, and 48 per cent in the UAE were prepared to pay more for goods made in the UK, because they perceive the quality as higher. According to Aldermore, over four fifths of UK SMEs trading overseas expect to see their exporting business revenues increase over the next year with 89 per cent of SMEs expecting growth.

“Any business serious about growth should be looking to export”

While this data is encouraging, it is not all positive. The SME confidence tracker from Bibby Financial Services earlier this year revealed that just 20 per cent of SMEs both imported and exported, while 7 per cent ‘imported only’ and the same figure exclusively sold goods and services overseas.

In addition, just one in ten SMEs planned to invest in their international trade capability. A separate HMRC report earlier this year found two in ten UK SME online retailers don’t import goods and 10 per cent don’t import or export.

Clearly, while some SMEs are embracing international trade, there are others who are not. The question is why?

Doing business today

The reality of doing businesses today means looking beyond the cosy borders of home – for every company. The breakdown in perceived barriers means SMEs today can, and must, think globally from the start. Chances are that if a product is selling in a home market, it will be in demand elsewhere.

Historically, barriers such as geography were credible but today commerce is borderless in the same way language is no longer a barrier. Technology has made tracking possible in real-time and unique to specific shipments while global media, with access anytime and anywhere, means cultures are no longer misunderstood or feared.

Unsurprisingly, this has led to a huge positive effect in online trading. The e-commerce sector is becoming increasingly globalised and SME online retailers have an open door to the world when it comes to expanding the international side of their business.

There are currently more than two billion internet users in 200 countries, with nearly 100 million of them in English speaking countries. It is a particularly good time for UK businesses to explore exporting options, given the current state of the pound.

Businesses should explore global markets for exporting

Years ago, each of the above barriers alone would be enough to put businesses off international trade, but none are relevant today. In fact, the only barrier left to international trade is fear and misunderstanding. It’s time for any SME that has not previously considered exporting to take a leap of faith.

The role of technology

>Understandably, smaller businesses need help in identifying opportunities to grow by trading internationally, and – importantly – support in understanding which international markets their goods and services could appeal to.

At the same time, SMEs have much to think about and the prospect of expanding into new and perhaps unknown markets is an easy deprioritisation to make when dealing with pressing affairs close to home such as tax, pensions and the general environment of caution around Brexit.

But this is where technology plays such a critical role. Just as it has revolutionised many other sectors, it has done the same for international trade.

There is a combined trading platform that brings together all the disparate elements of trade to make it easy for businesses. Instead of piecing together various software systems like a patchwork blanket, juggling multiple workflows, certification processes and orders, SMEs can get all the tools they need for trade in one place.

UK SMEs are the backbone of this country and will become even more critical as we enter a period of economic instability with our transition out of the EU. Born in Britain still has high stock and some of our entrepreneurs are amongst the best in the world. The Government has an agenda to back exports and there are other markets out there looking to invest and bring in new and innovative products.

The fact is, there has never been a better time to consider exporting. It’s quicker, easier and cheaper than ever before. If you are a UK SME with a product to sell, ask yourself, ‘Am I thinking big enough?’.

After all, there is no such thing as a business that is too small to export.

Geoff Runcie is managing director of Morgan Goodwin.

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Anna Jordan

Anna is Senior Reporter, covering topics affecting SMEs such as grant funding, managing employees and the day-to-day running of a business.

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