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Top Tips for SMEs When Taking Businesses Abroad

In the light of the UK’s forthcoming negotiations concerning the EU and geo-political changes during the past year, it’s not a shock that SMEs are exploring different avenues when exporting as they are arranging to invest in their exporting ability over the upcoming months.
Below are the top tips SMEs need to consider when taking their business abroad:

1.      Where to go?

Current research undertaken by Alliance found that UK SMEs view Germany as the most significant country to the UKs economy in the EU, closely followed by France. Small business whom don’t have much experience exporting outside the EU tend to be attracted to countries that have similar trading environments. It’s vital that you don’t limit yourself due to the ease of doing business within such countries and allow the opportunity within different markets to make it easier to decide where you export to.

2.      Thorough Market Research

Doing thorough research allows you to view the best markets for your products and services, as well as identifying the size of your businesses potential customer base. Find out who your competitors are and their current market share so you can establish your competitor market. Key aspects such as language barriers, legal and time zones need to be taken into consideration to assess the effect these differences could have on bottom line profitability, sales and operations.

3.      Keep your options open

In order to minimize the effect of economic and political changes to your businesses customer base, it’s key to have a variety of customers in different countries as this encourages protection against overreliance on a small number of markets.

 4.      Be mindful of currency changes

Constant changes within the global political scene have affected currency markets over the past year. Businesses that buy and sell overseas, currency fluctuations can rise input cost and reduce profitability enormously. It’s vital to monitor market and currency fluctuations to protect against these impacts; therefore, having a foreign exchange provider is useful as they can lock in rates to protect against further currency movements.

5.      Ensure your cashflow is in check

Even though exporting allows for businesses to grow, it can bring difficulties such as prolonged customer payments and subsequently cashflow. There are currently a wide variety of export finance packages which you can get from different funders, so remember to do your research to decide which suit you.

Added: 12 Oct 2017 11:05

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