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Exporting is Fun – or Ought To Be

The Government has renewed its efforts to persuade British companies, and particularly SMEs, to engage in exporting. The reason to do so is obvious, given the present uncertainty relating to British exports to Europe and our continuing adverse balance of trade.

It was British Prime Minister Harold Macmillian who coined the phrase “Exporting is fun” – and of course it can be. It can also be highly profitable, particularly at a time like the present when the pound sterling is at a historic low.

Back in 2016, the Institute of Chartered Accountants conducted a survey concerning the growth of exports within the British business community. It found that 53 per cent of British companies exported in 2016, a figure unchanged from 2014. Only 4 per cent of the non-exporting firms planned to expand overseas, a sentiment that has not vastly changed in the two years since.

The reasons why UK companies with excellent products are reluctant to get into foreign markets are clear. Successful exporting often involves product adaptation, well-identified distribution channels, expense and above all, risks.

"Ministers would love Britain to be up there with Germany as an exporting powerhouse, but have so far failed to learn the right lessons", says Guardian correspondent, Larry Elliott

This risk is even larger for SMEs, particularly when it involves late or even non – payment.

It is easy to understand why many small British companies are reluctant to ship valuable goods or perform expensive services for overseas customers who they have met only briefly, if at all. Language and cultural barriers do little to create positive relationships, aggravated further by unfamiliar and at times extended credit terms. All of these make exporting less fun than it should be.

The answer to much of this is found in better information. The Government does its best to provide this through its numerous services for exporters and there are many sources of information that can be tapped – if the smaller business has the time and resource to do so.

The Credit Protection Association is doing its bit to help the export drive by providing quality online credit reports on customers worldwide. Obviously, given the cost of obtaining and analysing data, a report on an overseas business can be more expensive and take longer to produce than one where a UK business is the subject. Extra cost can soon be justified, however, if it helps to establish relationships in a brand new market and perhaps, even make exports fun.

David Hawkins. 22/8/18

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