Time to Put the Negative Brexit Mindset Behind Us
Words Provided by The Export Hub
I’m in a long queue when it comes to venting my exasperation at the ongoing farce that is BREXIT. Business is anything but normal and if we are to believe the politicians, a no deal scenario which at the present moment looks likely, is likely to lead us into some economic disaster.
My view on this?
BREXIT has happened. We can decide to participate in this never ending negativity or, we can widen our horizons and identify new trading opportunities; at our back door and overseas in Europe and emerging markets.
What I see every day is this: SMEs being hardy and tenacious. Irrespective of what they provide, products, services or both, challenges have always been present especially when looking to trade overseas or enter into new markets closer to home.
I am talking to companies from all sectors most of whom have an appetite and a plan for export and growth.
Their plans are not gathering dust.
Staff members are being turned away from the gates.
Quite the opposite in fact.
I will stick my neck out and say there’s never been a more important time for businesses to seek help and to access expert advice when looking to grow, especially overseas. I’m not talking about the theory you may have attempted to digest from the management text books. But real, practical and time served expert advice that unlocks Pandora’s Box and enables you to trade with high levels of payment certainty and confidence.
So, what are the challenges that businesses discuss with me every day? These include my clients, many of whom trade successfully overseas.
- Juggling business finances with a growth plan. These are the businesses that chase sales and handle disputes. Some are keen to explore exporting but unsure what to do next; some worry about paying salaries and suppliers at the end of every month. These challenges have beset SMEs, the backbone of our economy, since time began have they not?
- Uncertainty about the future. This is usually linked to the need to predict customer and market trends accurately given subsequent decisions will be taken on these. Then there’s the way in which customers buy products and services. The internet is a friend for some; a foe for others especially if price is what determines who gets the business. All this is set against the backdrop of an ever changing economic climate. But hasn’t this always been the case? Throughout history businesses have had to face challenges in turbulent and calm times. Yesterday’s challenge = today’s opportunity.
I have seen companies where procrastination and uncertainty has defined their business. Mired in SWOT analysis and theoretical business plans that exist to satisfy the demands from their accountant, they’ve suffered the ubiquitous ‘paralysis by analysis’.
Don’t delay in making decisions or investments or taking calculated risks. You risk being left behind by a more strident competitor.
Blue sky thinking has its limits….
Many businesses focus on the big picture; where they’re going to take their business several years down the line. Often this blue sky thinking is to the detriment of putting more pressing concerns such as cash flow, profit margins, reducing costs and financing (especially when agreeing to extend credit terms to their customers) – under the microscope. In the last 30 odd years I’ve seen more businesses fail due to:
- Running out of cash.
- Agreeing to sales or a contract on profit margins that are unsustainable.
- Being management top heavy with scant attention paid to the performance of the sales team and how they should build a robust sales’ pipeline.
- Offering credit to businesses and continuing to do so without monitoring any changes in credit status. A symptom of poor credit management procedures and processes.
…than failing in their efforts at blue sky thinking.
Finding new customers – the Holy Grail for any business
Looking overseas for new customers is a big potential growth area for a business. The inescapable fact is that the risk of trading with a company overseas with the right support from financiers, debtor protection providers and various government bodies - to markets such as Greece, Turkey, Italy, Russia, Asia and the Middle east - can be just as safe and rewarding as trading with companies in the UK. My advice to any business with an interest (no matter how tenuous) in exploring exporting is to seek advice and talk it through even if you subsequently decide now’s not the right time. Contempt- prior- to -investigation can result in a good growth opportunity failing to see the light of day.
So, warming to the theme of growth through overseas export what tools and support is available to assist your company?
Let’s say you want to export to the Middle East and you have identified some good customers.
Begin by asking:
Is the company creditworthy and if so, how do I finance the transactions?
What happens if they don’t pay or become insolvent? Can I be protected? Can I recover the debt and how?
On their own these are not reasons to forgo exporting. Solutions are readily available to significantly reduce or remove the risk.
For example Trade Credit Insurance not only identifies the trading risk, it puts in place protection that can cover as much as 84% of your overseas invoices. Should a company covered by your policy fail to pay or become insolvent, your policy will pay out provided you have complied with your policy conditions. Premiums are at an all time low for Trade Credit Insurance. You can offer credit terms to new customers knowing that your policy is not only an enabler for growth; it also provides that vital safety net.
For these reasons alone I would encourage any business with growth on their agenda to explore Trade Credit Insurance.
So let’s say you have established and accepted the risk. Trade Credit Insurance is in place.
You now have to arrange funding.
Your first port of call is usually your bank. Unfortunately, in my experience most banks will only fund overseas invoices at the same level as the UK.
You may want to talk to an alternative financier with the capability of supporting invoice finance at a high level.
Don’t let the negative media mindset seep into your business. Remind yourself why you’re an entrepreneur. Push ahead with determination to grow your business. Use the tools and the expert advice on offer that will help you explore and ultimately enter new markets in the UK and overseas.
Create your own business success story.