Evidence from a number of leading business organisations* points to overseas demand fuelling growth for firms that choose to export.
Yet a survey commissioned by Lloyds TSB Commercial suggested that nearly a quarter (24 per cent) of British SMEs are involved in the export market.
There is clearly an opportunity for the right firms but research is key to assessing how suited your company is for exporting to established or emerging markets.
Those wishing to explore new territories should conduct extensive market analysis, make use of available guidance from bodies such as UKTI, and ensure they have the appropriate funding in place to support growth.
Thorough planning is crucial and it’s important for firms to consider the wider impact of international expansion, such as additional pressure on resources and cash flow.
While it’s important to take a cautious approach when entering new markets, it’s also vital that businesses don’t let perceived barriers stop them from exploring the potential opportunities, with total exports from the UK worth just over £262 billion in 2010.
Economically, now is a good time to consider exporting. Favourable exchange rates and growing markets in foreign economies offer an opening for UK firms with a unique and competitive product or service.
Weak domestic demand is also encouraging more businesses to look abroad for growth opportunities. In Lloyds TSB’s last Business in Britain report, over half of businesses (57 per cent) said they expected weaker home markets to pose the greatest threat to their business over the first six months of 2011.
However, it’s worth remembering exporters are exposed to less risk if the country they enter has an investment protection and promotion agreement with the UK, whereas territories that suffer from political instability, a poor infrastructure and a high crime rate can be risky options.
Whether it’s the convenience of a foreign currency account because you’re already exporting or a short term currency loan to help you get started, Lloyds TSB Commercial can offer access to locally-based international specialists who can guide you and make overseas trading as simple as possible.
For more information about how Lloyds TSB can help you explore new overseas markets, please contact your Relationship Manager or visit www.lloydstsbbusiness.com/exporting
* May 2011 CBI quarterly SME Trends Survey says 23 per cent of firms said export orders were up. The ONS says exports grew 11.7 per cent.
This article was kindly provided by Mark Dodd, Head of International, Commercial Banking, Lloyds TSB
Lloyds TSB Commercial is a trading name of Lloyds TSB Bank plc and Lloyds TSB Scotland plc and serves customers with an annual turnover of up to £15M. Authorised and regulated by the Financial Services Authority.
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