Small businesses are being encouraged to fulfil their international potential this Global Entrepreneurship Week, making the most of industry support and latest technologies to make the transition.
Chancellor George Osborne recently set a target to double the value of exports to £1 trillion by 2020. According to the Confederation of British Industry (CBI), this could be critical to future commercial success: Currently, it says only one in five of the UK’s small and medium-sized businesses export. Those that do are 11% more likely to survive.
“Experience shows that small UK businesses can benefit enormously by tapping into export markets,” said Xero managing director Gary Turner. “Inevitably, success requires thorough research into the different regional operating conditions, customs and legal regulations. This is why it is worthwhile grabbing as much advice and support as possible, as well as keeping a close eye on operating costs and conditions.”
Xero’s three top tips for export success:
Tip #1: Do your homework. Plan ahead by getting to know your potential export market. Work out what competition exists and what price you need to sell at to make a profit. Speak to other firms already operating in your chosen region and establish the best route to market. Before going ahead, be completely confident that there is a demand for your goods and services.
Tip #2: Take financial advice and support. Export strategies often require upfront capital and credit capacity. In addition to traditional lending routes, consider the UKTI and UK Export Finance for financial support and guarantees, as well as local knowledge of most trading nations.
Tip #3: Take to the cloud. Use online accounting to create foreign currency invoices and bills by setting a default currency for the customer or supplier. This simplifies the process of accounting for currency gains and losses with rates updated hourly, so you always have access to the most up-to-date account information. The process can be carried out using a foreign currency account or a nominated domestic account. Using apps such as TransferWise alongside cloud accounting software can also cut the cost of foreign currency payments by removing costly transfer fees and offering competitive exchange rates.