There are excellent growth opportunities out there for businesses if they’re looking to export – so how can small businesses best deal with the challenges and risks? Removing all risks associated with overseas trade is an impossible task, but it is possible to manage and be aware of them.
The rise of BRIC markets and the relative weakness of sterling makes this a lucrative time to get into the export market. Though exporting for the first time or expanding your current export territory can be daunting, there are ways to make it more manageable.
Difficulties essentially boil down to the differences with dealing with UK clients and overseas customers. After all, if there’s an issue with an order destined for London, it’s likely to be far easier to resolve than an order that’s destined for Beijing.
One of the biggest issues for companies looking to trade abroad is ensuring timely payment. Though you might operate on an open account basis in the UK, this system probably won’t be something you’ll be comfortable with when trading abroad, at least with new customers.
You can mitigate some of this risk by using invoice finance solutions – these let you unlock the capital tied up in an invoice before the customer pays by using an invoice finance lender. Many independent lenders are able to help with export factoring services which can be a good way to help small businesses manage the risks of exporting for the first time. For high value contracts, you could even consider using letters of credit. These have become a popular tool for equalising the risks to both parties, particularly in the early stages of trading.
If you need a new lease of life for your company, it’s worth looking into the export market – invoice finance is always there if you need a helping hand.