The Locksmith Journal Nov-Dec 2016 - Issue 47 | Page 65

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BUSINESSSUPPORT • 65

SMES should go west for exporting opportunities

By Alex Littner , Managing Director of Boost Capital
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MANY OF THOSE LOOKING TO export in a post-Brexit world are seeking new markets beyond the EU , and where better to start than with our largest cousin ? As sterling ’ s value has fallen dramatically against the dollar , politicians and entrepreneurs alike are spotting a great opportunity for UK firms to market themselves across the Atlantic , and win new business Stateside .
WEAK STERLING ’ S SILVER LINING
The threat of a so-called hard Brexit has seen the pound fall to its weakest level ever against its trading partners , and to historically low rates against the dollar . Many people are worried , plus businesses are anxious for future trading terms with the EU to be finalised . It ’ s possible Britain could leave the single market by 2019 , and without a free trade deal with the rest of Europe . Such an outcome will mean SMEs must look further afield for export opportunities . Experts say they should regardless of what ’ s agreed with Brussels . About one in five UK firms export at present , according to Enterprise Nation , and of those that started in the last six months , more than 90 per cent expect to grow . Sterling ’ s weakness gives them good reason for optimism - British goods look cheaper overseas , which can boost export sales . The USA is one potentially fertile market , as are India , China , and countries in the Middle East . Official figures tracking trade don ’ t yet show this expected bounce in exports , but it is early days . With the pound likely to idle at its current level for some time , this positive Brexit side effect could still emerge .
USA TODAY
Even before sterling ’ s freefall , Theresa May ’ s new Government had singled out the USA as a target for UK exporters . The US was the first country Liam Fox visited as head of the newly created Department for International Trade back in July , announcing the opening of three new official British offices in San Diego , Minneapolis and Raleigh in North Carolina . Barack Obama may have warned ahead of the EU referendum the UK would be “ at the back of the queue ” for any future trade negotiations if it voted to leave , but such rhetoric has since been toned down . UK politicians remain hopeful North America will prove a productive trading partner .
Why America ? There are several obvious reasons , the first being language . Then , the US is already the UK ’ s single biggest export market – it imported £ 47.5 billion worth of British goods last year . Plus , it has the merit of representing almost 30 per cent of the world ’ s consumer market . All of these suggest British exporters could be pushing at an open door by trying to sell to the US . The British Chambers of Commerce ( BCC ) identifies advanced engineering , clean technology , creative and media , energy and power , as well as financial and professional services being sectors of particular possibility .
OVERCOMING COLD FEET However great the opportunities posed by exporting , at present few UK firms plan to sell abroad . Just five per cent of SMEs intend to start exporting over the next five years , according to recent research by the Centre for Economics and Business Research for World First . This means Britain is likely to fall short of the previous Government ’ s vow in 2012 to raise our exports to £ 1 trillion by 2020 .
Why don ’ t businesses want to export ? Cultural and language barriers , red tape , and believing a product or service isn ’ t right for foreign markets are the most common reasons . Yet , the US is an English-speaking country . It has a reasonably benign regulatory environment , and strong rule of law – the BCC calculates importing a standard container of goods to America requires just five documents , takes about five days , and costs an average of £ 1,315 . And there ’ s strong evidence American consumers like British products . Only recently it was announced that sales of UK-made gin to the US market have risen by an amazing 553 per cent over the last decade , for example .
MADE IN BRITAIN – SOLD IN AMERICA
Some have expressed fear that ‘ Brand Britain ’ has been damaged by the Brexit vote , but many British businesses with a strong identity are still popular overseas . Household names such as Jaguar Land Rover , Dyson , and Cath Kidston are favourites with foreign customers , encapsulating something quintessentially British – whether it ’ s tradition , innovation , or originality . Made in Britain is a label still associated with quality in many parts of the world – businesses should exploit this advantage .
LOCKSMITHJOURNAL . CO . UK | NOV / DEC 2016