BEM: Business East Midlands

Grow Your Business where Business Is Growing

Posted on 10. Jun, 2010 by editor in Business Advice, Business News

Whilst the UK economy remains uncertain, Peter Hogarth, International Trade Director at UK Trade & Investment (UKTI) in the East Midlands, explains why now might be the right time for businesses to seek out new overseas customers.

With Icelandic ash clouds interrupting not only the tourist traveler, but impacting on trade; and the economic fall-out from Greece affecting the value of the euro, this may be a time when many businesses hear the call to expand their overseas ambitions, but are a little weary about taking action.

Peter Hogarth is however much more upbeat about the potential for our region. “There are many areas of the globe which continue to flourish and remain buoyant. In a world made smaller by communications, travel and technology companies should be looking to grow their business where business is growing”.

Many firms will look to our nearest neighbours in Europe as the first source of potential overseas clients – and despite the current economic climate the exchange rate provides a very useful tool in the UK armament. Whilst the pound has strengthened against the euro in recent weeks, the levels are still below what we have previously seen – meaning many UK firms have been able to compete or build bigger margins than their mainland competitors. Against the US dollar the story is even more compelling. A current rate of 1.44 USD is eleven percent down on the twelve month (June 09-10) average and 27 percent down on two years ago.

Like all investment adverts, the exchange rate story is one which has a cautionary rider to it – they are subject to change and will go up and down so a good relationship with your bank is essential.

Any advantage they give must be part of a wider export strategy for East Midlands companies. The world is changing rapidly – however since the Second World War, the rise in world trade has consistently far out stripped the growth in global GDP. The UK is the sixth biggest manufacturer in the world and the esteem with which our products and services are held overseas means we are in a good position to further grow our exports. The evidence about the business benefits which can be achieved through exporting is clear and compelling. In the context of a depressed British market, the benefits of sustained revenues from a well diversified portfolio of overseas customers are even more vital. We should not forget that there are opportunities overseas amongst countries which are still growing, and that new opportunities are constantly opening up. With the benefit of UKTI’s expert help, negotiating the challenges of unfamiliar markets overseas can be much more rewarding and less daunting than many companies might anticipate.

The message is clear – don’t just look only at the domestic market to grow your business – there are opportunities all across the world. There are general principles which apply regardless of the shorter-term economic conditions. If you’re looking at the emerging markets, which can provide high returns, but are challenging places, conducting some basic research before you go can maximize the chances of success. Even a little knowledge about the business etiquette or the regulations covering your product can make a big difference. Likewise, if you’re looking at more familiar markets for more guaranteed returns, such as Germany or another European country, doing some initial research to identify the market opportunity can help make the most of the return on your investment.