How SMEs can use exports to prevent financial woe
The initial stages of an economic recovery are currently underway, and confidence among British businesses appears to be soaring at present.
However, more could still be done to boost the situation and that is where exporting comes into play.
The relatively weak value of sterling makes expansion into new markets a possibility, but as yet few businesses appear to trust the economic situation enough to part with vast swathes of cash.
Exporting is not an easy process to undertake, as it carries a great deal of risks, but long-term success overseas can help to shift businesses towards financial stability.
Throughout the recession this sort of expansion was limited and plenty of companies faced insolvency and financial strife as a result.
However, the change in situation presents a new opportunity to exploit – but how could companies go about doing this?
Building contacts
Expertise of certain markets can help companies go a long way when they are considering export potential – as there will be an awareness of what support networks are in place.
These are of vital importance to finding the best deals and ensuring that products are not placed in competition with other local businesses.
Developing links and commercial partners is often the first step, with the internet and social media a great source of information.
Focus on specific regions
It’s very easy to think that a business can operate in every country in the world, but in truth that privilege applies to a very select few.
Picking the markets with attractive conditions and looking to exploit them will inevitably be more beneficial in the long-term than taking a broader approach.
Outsell direct rivals
The focus of business is always to make profit, and that means making sales – even if prices need to be slightly below the rivals to ensure it.
Money into the company lessens the likelihood of the company entering administration or receivership and helps to broaden company exposure if some money is pumped into advertising and marketing.
Sources of funding
Sourcing funding is not always an easy task and exporting is deemed as a higher risk venture due to the number of factors involved.
On the surface therefore, it appears to be dodgy territory to want to enter, but that is if you ignore the possible gains that are on offer.
Sourcing funding from within following a restructuring could potentially provide the additional money required if sourcing from a bank is not a viable option.
Either way, there are definite benefits to be gained from exploiting the current economic climate through the medium of exports.
By Phil Smith