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CENTRAL SOUTH MID MARKET COMMERCIAL


ADAPTABLE


Going global: Stepping into a new world of opportunity


As our BDO Central South Mid Market focus enters its second year we again turn our attention to international growth. In addition to our latest research to find the top 20 companies growing most rapidly internationally, we are also recognising the special performance of several companies who are performing exceptionally on the international stage


As British business confidence improves, more of the region‘s mid-market companies are looking at international markets for expansion.


That‘s good news for ‘UK plc‘, which needs to boost exporting, and for our regional economy. But, are our local businesses ready for the journey abroad? Do they know their next trading destination? Do they actually know the route map to successful internationalisation?


The journey from non-exporter to global business generally starts with ambitious commercial dreams and evolves into well- structured realistic international operations – and it should. Businesses need confidence, enduring drive, and astute pragmatism to overcome the challenges and seize the potential rewards of global markets.


Businesses also need to be patient – international success is seldom achieved ‘overnight‘. Traditionally starting with exports to ”safe havens”, now the Internet facilitates easier routes to more disparate markets.


”Companies need to research and plan the ways and means with which they will make their journey, study their intended destinations and the trading differences, and obtain advice from experienced and trusted sources, such as peer groups and impartial professional advisers,” explained BDO international liaison partner Kim Hayward.


”Sustaining UK growth long term will rely on how well the UK can take advantage of international opportunities. As the potential driving force behind the UK economy, medium-sized businesses (MSBs) should lead the charge towards global growth,” he added.


Internationalising is not simply exporting


Successful international MSBs have 21st century mindsets, says Arbinder Chatwal, BDO‘s head of Indian advisory services.


”Today, thanks largely to the Internet and sophisticated supply chains, we have a global village of commercial activity, and most MSBs will get opportunities to trade internationally. But, simply exporting a UK-originated product or service is not today‘s international way of working,” Chatwal explains.


”Businesses need to begin to think and act like an international business from the start, which means being well prepared, adaptable, responsive, creative, using technological advantages and getting more involved overseas and taking control of their markets when possible.


”Being drawn into exporting or international trading through a customer‘s overseas


www.businessmag.co.uk


growth is a common first step. But, their market may not match yours, or your international objectives. Better to determine your own destiny by focusing on your own trading strengths.”


Chatwal highlights a new international report by the Institute of Mechanical Engineers and BDO, which reveals that the ‘Made in Britain‘ branding doesn‘t necessarily have the cachet it once had, except in specific markets. Today, business internationally is won on tangible merit.


The report also suggests pricing may not be so important – despite competition from low-cost producers. There is growing realisation that sales of all kinds, don‘t end with the transaction. There is revenue to be made through after-sales and product


Continued ... THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – JUNE 2015


CHALLENGES BULLISH


FIVE STEPS TO INTERNATIONALISATION


Building the knowledge and confidence to go abroad


• Understand your company‘s true export potential – the attractiveness of your goods or services. Seek help from the Government [UKTI] and professional advisers


• To overcome lack of confidence, consult experienced exporters


• Strengthen your international links and networks


• Develop on-the-ground experience – find agents or distributors.


Boosting practical knowledge of doing business overseas


• Obtain local and cultural understanding, including regulations


• Develop or hire international knowledge • Finance exports and reduce risk • Identify appropriate UK Export Finance (UKEF) support.


Growing from successful exporter to international business


• Develop an international strategy and have the resources to implement


• Expand footholds in existing markets • Seek growth to the next set of markets • Financial planning for growth – understand cashflows and investment.


Investing for greater rewards


• Tailor investment models to each market • Generate and meet customer demand with sales offices or self-owned distribution centres


• Increase knowledge and accelerate growth through partnerships and joint ventures (JVs)


• Combat risks, including corruption and bribery


• Seek government and specialist advisers‘ assistance to identify investment opportunities.


Becoming a truly global business


• Operate subsidiaries that act as regional hubs


• Expand local business processes while maintaining brand identity


• Consider business reputational risks • Support new exporters including supply chain.


Taken from ‘Go Your Own Way‘ – a guide for MSBs produced by the CBI in association with BDO.


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