Firms look Overseas to Escape Slump
Almost 40 per cent of UK businesses are planning to expand in the next year by trading abroad, according to HSBC Commercial Bank.
However, the HSBC survey also revealed that firms are put off trading overseas by barriers such as a lack of experience of foreign trade, the cultural gap between themselves and foreign traders, and language differences. Head of commercial banking Steve Bottomley said:
“As markets in the UK become more challenging or the cost of supplies, services and skills become more expensive, an increasing number of businesses will consider overseas operations in order to run their own business in the most cost–effective and successful way possible,”
“It is vital to take advice on all elements of trading to ensure that logistically the operation is viable and that it becomes a profitable experience for your business both internationally and closer to home,” added Bottomley.
The government’s trade facilitation agency, SITPRO, said that small businesses are often apprehensive about entering foreign markets, and advised them to carry out thorough market research before doing so. SITPRO spokesman Paul Hiscock said:
“International trade can seem daunting to people starting out. There are lots of procedures to follow and a lot to consider, but if you’re going into it prepared it shouldn’t be so hard to tackle.”
“It’s about knowing what you’re selling, knowing about the market that you’re selling to and the procedures that you need to deal with, he added.
“The people who have problems are those who don’t consider the problems they might face or ask the right questions,” continued Hiscock. “The biggest thing is the payment risk – you need to get your payment terms right so you know exactly what the customer is paying for and how they are paying you.”
To download guides on all aspects of international trade, visit the SITPRO website