Anita Brook is founder of Accounts Assist a growing firm of Chartered Accountants. She’s been advising small business, sole traders and consultants for 12 years.
When the UK just doesn’t seem big enough to fulfil your business goals, it might be time to make a move overseas. Anita Brook looks at what to consider before seeking markets across the pond.
Making business moves internationally might seem like a scary prospect, but if successful, it is a risk well-worth taking, with global markets providing the opportunity for levels of expansion well-beyond the limits of our little islands. So, how can you minimise the risks and maximise your chances of success around the world?
- 1. Know your market
Do as much research as you can in order to gain an insight into how the market operates and what it wants. This is not as easy as researching the UK marketplace, but there are resources, detailed in point three, which can help.
- Local employees
Invest in employing somebody local to the country you’re targeting as quickly as you can afford to. However much research you do nothing can replace true insider knowledge. And, as your business expands, overseas customers may respond better to people who understand their culture.
- Utilise free support
UK Trade and Investment (UKTI) http://www.ukti.gov.uk, is a government body designed to help UK-based companies achieve success abroad, by helping forge contacts and encouraging overseas businesses to trade back with the UK. The Foreign and Commonwealth Office (FCO) http://www.fco.gov.uk/ can also provide information about overseas territories and is responsible for promoting British interests around the world.
The Chamber of Commerce http://www.britishchambers.org.uk/, Trade Associations http://www.britishservices.co.uk/associations.htm and the Chartered Business Institute (CBI) http://www.cbi.org.uk all have departments dedicated to helping businesses export or invest overseas.
- 4. Instil trust
There is a massive trust issue doing business with people hundreds and thousands of miles away from the head quarters. New customers in foreign climes will want to know if they can put their faith in you. Using the contacts listed above will help, as well as maybe instructing specialist agencies to make enquiries.
Make sure senior management pay regular visits to the new countries you’re operating in and set clear and monitored performance requirements, reporting procedures and responsibilities for any new staff.
- 5. Factor in the exchange rate
If you’re not confident with foreign exchange deals, then talk to your bank about overseas and investment plans. Fluctuations in the rate of exchange are a fact of business life and need to be considered in any plans. If you’re looking to invest try to raise finance in the same currency.
- 6. Check your tax
You may find that can’t get tax relief for losses on foreign exchange or, you may get taxed on gains you won’t have recognised. There could also be restrictions on how much you can finance by way of loans rather than equity capital. Visit http://www.hmrc.gov.uk for more information.
- 7. Keep your finances safe
When trading overseas you need to consult your bank regarding what facilities might be available. In addition to exchange rate risk, you might consider keeping banking facilities closed to new customers – especially when there are difficulties in ascertaining reliable credit risk information.
- 8. Seek advice
Get as much advice as you can, talk to as many people as possible and make sure you’ve sought the guidance of a reputable accountant when it comes to keeping the monies of your overseas venture in order.
There’s a whole world out there that might just be waiting for your business idea, so now could be just the time to take the step off the UK and into markets around the world.
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