Business News
Sponsored by: Profit-Growth Unlimited
Exports should go US Postcard from Bahrain June, 2019
Growing your business
By John Holder, Business Growth Specialist Profit-Growth Unlimited
If you are keen to grow your business significantly, have you considered Growth By Acquisition? I have some thoughts to share about how and why a small business might adopt this strategy. The obvious takeover target
is a direct competitor. This might be a local firm, but if you bought a business in another part of the country that could give you a combined larger market. Either way, you will need to have good systems and procedures in place to integrate the two businesses smoothly. This has the advantage of being able to strip out duplicated overhead, thus yielding a higher net profit than the two separate businesses achieve alone. An alternative approach is to
take over a business offering a complimentary product or service, that your existing market is keen to buy. This way can be highly effective when your customer lists have little overlap, thus yielding an easy route to grow the sales of both activities in much the same way as with a joint venture. How might you do this?
There are a variety of ways to finance such a takeover, including deferred payment from the new additional sales revenue, and asset finance for a manufacturing business. However, I believe the most important element is your motivation, which should be to serve your customers better with the newly enlarged business. Given that, then good professional advice and thorough due diligence should result in a happy outcome.
Email:
john@profit-growth.co.uk Web:
www.profit-growth.co.uk Tel: 01788 812050 Mob: 07932 688281
14 CHAMBERLINK June 2019
Paul Kehoe, immediate past president of Greater Birmingham Chambers of Commerce and now chief executive of Gulf Air, based in Bahrain, asks if the UK government is too consumed with Brexit to take simple steps to help Midlands companies succeed in export markets.
“It’s the economy stupid” or “the economy, stupid” was coined by Bill Clinton’s 1992 presidential campaign strategist, James Carville, as part of the battle against the then sitting president George H Bush. It clearly worked as part of the
overall strategy as Clinton overcame Bush’s initial high- approval rating to win both the electoral college and the popular vote and become the 42nd President of the United States. A Birmingham politician once
advised me of his mantra, “Politics, it’s always the politics”. For my local acquaintance, it wasn’t such a successful strategy but at least he didn’t call me stupid. I do believe that the statement
from the US President has more legs than the political take of the Brum councillor. One only has to look at the machinations that are on-going in Westminster to see whilst political events are dominating the news, it’s the underlying economy that really matters. What if the UK Government had
not been consumed by Brexit; what might they have achieved if they had worked in harmony with the economy rather than concentrating on the secession of the UK from the EU? I guess we’ll never know. The complex issues emanating
from the “leave or not leave” saga will have lasting ramifications for the UK economy and its relationship with other trading states. Whether our No 1 trading partner,
the USA, with some $64bn, could have been significantly higher, out or in the EU, only time will tell. Table 1 shows the top 10 EU v non-
UK Exports 2018 Non EU
1 USA
2 China/HK 3 Switzerland 4 UAE
5 Turkey 6 Japan
7 South Korea 8 Canada
9 Singapore 10 India
Total
US$bn 64 38 25 10 10 8 8 7 7 7
184
EU Germany
Netherlands France Ireland
Belgium Italy
Spain
Sweden Poland
Denmark
US$bn 47 33 32 29 19 14 14 7 7 4
206 *Table 1 British exports 2018 in US $Bn to Top 10 Non EU and EU countries
EU and demonstrates the scale of the vast US economy and, despite its slow down, the rising importance of Chin. If that continues to grow at is current rate it will be equal to Germany by 2020. While not diminishing the importance of the current tariff- free trade between the UK and EU, even with tariffs, there are countries beyond the Union where British goods and services are in great demand. None more so than the World’s No 1 economy, which seems to be gaining momentum in terms of its economic output despite the political rhetoric of sanctions, trade wars and the like. Whether President Trump is the
instigator of the economic boom or just riding the cyclical wave, there is no doubt how important the UK’s economy is reliant on transatlantic trade.
Nearly 40 per cent of the top 10 non-EU trade goes to USA or
‘In America, they don’t do things by half; whether it is the portion size in the Cheesecake Factory or the size of their Armed forces – it is all big’
A snapshot of Bahrain
Canada, equivalent to Germany, Belgium and Sweden. The question has to be how can we leverage this economic opportunity? If the US is a growing economy, can we export more into that market? The prize, trade tariffs apart, may just be worth jumping on an airplane and trying to do that. With many companies in the Midlands already geared up for export, and with organisations like the Chamber ready to help, all it takes is support from the UK Government to ensure we succeed. Ooh, hold on, they all appear to be consumed by Brexit!
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