In a climate of strengthening business growth and economic prosperity, budding SME exporters should be feeling more confident than ever about sending their goods and services overseas. According to the BCC (British Chambers of Commerce) almost one in five service sector firms are currently on the verge of exporting.
So what’s holding small businesses back?
BBC figures showed that for 32% of those exporting for the first time, excessive overseas regulation was seen as the biggest barrier, while according to a . BSI survey, one in four SMEs fear external regulations will hinder international expansion, with other concerns including a lack of contacts 17%), resources (16%), knowledge (15%) and talent (15%).
The complex tax, VAT and compliance regulations involved in the export process can seem onerous to SMEs, especially those who are trading overseas for the first time. The situation is compounded by the fact that export rules vary from one market to another.
With help and support available from a variety of sources, there is no reason for SMEs to allow red tape to tie up their export plans. Often it is simply fear of the unknown: foreign markets, unfamiliar languages, cultural nuances and confusing local laws that must be observed. But these things can be tackled.
What’s the solution?
For many exporters, the ideal solution is to engage the services of a third party provider with specific expertise in the destination market and well established relationships with delivery partners in those territories.
Many of the largest logistics service providers include useful information on their website – for example, the UPS Export Toolkit explains how taxes are calculated on goods crossing borders and clarifies the rules on VAT ratings.
SMES also need to overcome the psychological barriers to exporting, which are often the result of listening to the negative experiences of other exporters. There are many horror stories about shipping goods to the more challenging overseas markets in the Far East. However SMEs with export plans of their own should not be deterred by the bad experience of another business owner. It should just make them determined to make this part of their business a success – primarily by doing their homework.
By seeking out advice from the relevant bodies, finding an experienced delivery partner, and finding out as much as they can about their chosen markets, many of the barriers to exporting will be removed.
Stephen Fear, the British Library’s Entrepreneur in Residence says, “We all suffer from fear of the unknown, so my advice to new exporters is to educate yourself until the issue facing you is no longer unknown.”
“Become knowledgeable about the subject of exporting, either by going on courses yourself or designating a couple of members of your team to go. Only after acquiring knowledge are you ready to take on the world.”
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