Is the greatest barrier to overseas trading a lack of understanding?
The largest barrier to small businesses trading in foreign countries is a lack of understanding of foreign markets, new research has claimed.
According to business content network BTube, half of SMEs in the UK say a lack of experience relating to overseas trading is preventing growth.
Building an international profile can significantly boost sales but it does require a lot of work and investment.
A digital platform is also needed in order to engage with customers effectively but the research suggested that 63% of firms believe they lack the knowledge to operate effectively.
This can mean that business operations are not cost effective and that finances are being spent unnecessarily.
In such instances business turnaround measures could be implemented to streamline a firm and ensure that it is operating at its true potential.
Similarly, failing to adapt business processes to suit foreign markets is also an issue for firms who fail to grasp how people in some regions carry out transactions.
The greatest challenge for SMEs in 2015 is to find new custom, stated in 35% of cases, so businesses need to ensure they are properly educated in how to deal with overseas companies.
Recruitment was also identified as a key issue, as nearly a quarter of small firms revealed they struggle to recruit and retain staff.
As competition grows too, many firms may discover that they have to pay a premium to hire staff with overseas experience and this could impact on their cash flows.
Successful overseas expansion requires detailed research and knowledge of the new target market to ensure that demand exists for products and services.
A failure to carry out such checks could result in poor performing sales campaigns and financial losses.
There is little to be gained from overcoming language barriers if the fundamental aspects of new foreign markets are not understood.
Taking time to understand overseas markets carries lots of benefits and can be more straight-forward than a lot of firms envisage – making the extra hours of research worth it in the long-term.
By Phil Smith