UK businesses need to export more

UK businesses need to export more

There’s a really good test on whether or not an economy is competitive on the world stage; can it can earn enough money from exporting to buy the goods that consumers want to import?



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UK businesses need to export more

This is called the balance of payments and it’s something that UK Governments have struggled to improve for decades.

In July 2015 the UK imported £3.4bn more than it exported. In fact last year the deficit amounted to 5.5% of GDP in 2014, sadly the worst performance since records began.

Yet in a recent report, 85% of UK Trade and Investment (UKTI) clients said that they wouldn’t have been able to achieve the level of growth they had without branching into international markets.

I could fill this page with statistics, but the simple fact is UK businesses just aren’t exporting enough.

This is strange to me given the desire of an ever growing middle class in far flung corners of the globe to own goods made in the UK.

I can understand how, having emerged recently from a long recession, UK businesses that survived would want to just focus on domestic markets. Although 2.3 percent annual UK economic growth is nice, it doesn’t compare to the growth being seen in countries such as China, Brazil and India.

For forward thinking small and medium-sized enterprises (SME) this shows one main thing; domestic growth could be limited and in order to take their business to the next level, they should not ignore the opportunities presented by exporting.

KPMG proudly supports the UKTI as part of the Exporting is Great programme. This is a five year programme driven by the government’s growth agenda aims by 2020 the UK will:

  • Double exports to £1 trillion
  • Increase the number of firms exporting to 100,000
  • Raise the number of SMEs exporting from the current level of one in five, to the European average of one in four.

Exporting gives companies access to new markets, revenue streams and disperses the business risks. It is also likely that as a result of exporting, a business can become more nimble with a more innovative culture.

While the opportunities can be plentiful, they can also be challenging.

My top pieces of advice to any business looking to break into another market would be:

  • Do your research about which market you want to break into, -attend a trade mission if you can - but at least be prepared to do some leg work
  • Choose your business model carefully and understand the tax and legal implications and payment mechanisms
  • Make sure that you are in contact with the relevant agencies, such as UKTI or regional chambers of commerce, who all have information and useful contacts that you can use on your export journey.

Yes it can be daunting but there is information, support and help out there. You will be surprised at the opportunities on offer and how it could transform your business and our UK economic prospects.

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