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36 international trade UK businesses need to enter new markets


One of the most crucial factors in the UK‘s economic recovery will be the willingness of British businesses to trade internationally, writes David Squibb, regional trade director at Lloyds Bank Wholesale Banking and Markets


Businesses must look to export if the economy is to grow; however with much of Britain‘s traditional export market facing similar economic difficulties, British companies must look further afield for opportunities.


New export opportunities


Many economies that have traditionally been known as the ‘emerging markets‘ have now in fact emerged, and are looking highly likely to outstrip the US and Europe in terms of GDP growth in the medium-term. China and India, to take two examples, present British businesses with a strong opportunity to grow their exports. Some are already beginning to recognise this fact, and UK exports to China in the year to September 2011 actually grew by 24%. However, even


with this increase, the UK‘s total exports to China still equate to only a fifth of what the UK exports to Belgium. India used to receive 6% of its imports from Britain; now it is only 2%. So it is clear that opportunities exist for British businesses outside of the traditional export market.


There are of course a number of challenges posed by exporting to new markets, and before a business enters into trade agreements with foreign partners it is crucial to conduct detailed research. The key to this approach is talk with banks and local Chambers of Commerce who can provide invaluable guidance on trading conditions in particular overseas territories. Embassies also provide a great deal of assistance, and can undertake local research on behalf of a potential exporter.


Maidenhead firm capitalises on overseas opportunity


New research from workplace provider Regus has shown that only a fifth (21% ) of domestic firms in the South East plan to start trading overseas, despite mounting evidence that companies operating internationally are performing better in the economic downturn than those solely focused on the UK market.


It is suggested that many local firms are still selling themselves short by continuing to ignore the potential of overseas trade.


One local company that is reaping the rewards of an international approach is Business and Facilities, a real estate and facilities management consultancy based at the Regus centre in Maidenhead.


The firm has operated internationally from its inception 10 years ago, taking advantage of high demand for


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specialist services in central Europe. More recently, it has expanded its project delivery into Eastern Europe, the Middle East and Africa. The company ethos is to deliver pan-European or global solutions with local delivery.


A virtual approach


Business and Facilities employs more than 25 contractors who mainly work on clients’ sites. For this reason Mike Liddle, managing partner, made the decision that permanent office space would be an unnecessary drain on company finances. Furthermore, the intention was never to open a network of staffed offices overseas but to focus all resources on the core business, minimising outlay on premises.


It was when Liddle was speaking at the same conference as Mark Dixon, the CEO of Regus, that he became familiar with


Financing international trade


Once a trade agreement is reached, it is important to have sufficient trade finance in place to cover the expected cashflows. Overseas trade tends to use more working capital than domestic trade, making it crucial to work with a bank team that has the international experience and specialist trade finance expertise


Regus’ offering and signed up as a Virtual Office customer in Maidenhead. This gave the firm a permanent business address, receptionist to handle calls and mail, and access to Regus’ worldwide network of drop-in business lounges thanks to Businessworld Gold membership.


Simplifying overseas business


Liddle is implementing the company’s ambitious overseas expansion plans and has taken the approach to appoint trusted local partners.


He continued: “A partnership approach is crucial when dealing with markets where English is not necessarily the ‘lingua franca’ of business, such as China and South America. It is also imperative when it comes to project delivery. Our partners allow us to operate in most countries and we rely heavily on their local expertise and knowledge to deliver a variety of projects which involve pan-European or global solutions with local delivery."


Property emerged as one of Mike Liddle


the top perceived obstacles to overseas expansion by respondents in Regus’ research. Liddle does not agree with this. “Property is not a deal-breaker to doing business overseas. Outsourcing our workspace requirements to Regus has served us very well in the UK and we are leveraging their overseas network in exactly the same way.


"When I travel to foreign cities across Europe and the Middle East to meet customers or partners, I know that there will be a Regus centre in a convenient location so I am guaranteed professional meeting space when I need it.”


THE BUSINESS MAGAZINE – THAMES VALLEY – JULY/AUGUST 2012


to find the correct solution. In the past few years we have seen a gradual shift away from open account trading towards more structured trade finance options to support the supply chain. There has also been a resurgence in the use of traditional payment instruments such as the documentary credit and bill of exchange, together with the use of discounting to accelerate cashflow or improve margins.


Exporting opportunities are there for companies willing to open up to new markets, and with the right preparation and careful use of trade finance, there is no reason why British businesses should not look to capitalise on these opportunities and secure growth in the long term.


Details: David Squibb – 07860-497170 Steve Clarke – 07920-207685


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