Business Growth Beyond our Shores

Recent research carried out by The Small Business Research Centre and Barclays Business indicates that small businesses that export are growing faster than those who simply serve the UK markets. Their report follows a survey of 1000 owner managers across the UK, plus detailed qualitative analysis by the academics.

The results showed that the highest proportion of those who did business overseas were London based, an unsurprising trend given the city’s global reputation. Around 66% of all those who exported operated as manufacturers or retailers, many with online trading facilitating their ventures.

Surprise Findings

One aspect that surprises bookkeepers and business people is that some 68% of the survey reported that they had been exporting since day one. This contradicts the perception that most companies start local before moving on to overseas markets.

Another thing that might surprise you is that many exporters did not make strategic plans to move in that direction. They simply followed opportunities and “fell into it”. 59% were initially approached by contacts for overseas trade and 25% acquired the business by referrals. The report points out that they were being “reactive”, rather than “proactive” and were therefore likely to be missing other opportunities.

Barriers and Challenges

Of course, an online presence means that you can be known around the world, and more likely to be approached from overseas. But it appears that the challenges of exporting put many businesses off actually pursuing trade across boundaries. The complexities of regulation cause fear of falling foul of them in other countries. The way the markets operate can be different to what you are accustomed to, and then there are the language and cultural issues to deal with. Finding agents and organising the logistics can also be daunting for potential exporters.

Your outsourced bookkeepers will be in agreement with the report which recommends that small businesses “need to know where to look for immediate assistance and which

sources of advice can be exploited to maximise opportunities quickly. From a policy perspective, agencies responsible for export promotion, public and private, need to market their services clearly to SMEs and be able to provide appropriate SME advice on a responsive basis. This would include information on, for example, country-specific rules and regulations; together with information on currency exchange management from financial service providers; as well as presenting cases on how it has been done by similar SMEs.”

Nevertheless, the report’s initial finding that exporting is proven to be assist growth makes it well worth considering whether there are any overseas opportunities for you.

Choosing Safer Business Risks

If you want to grow and develop your business, you must inevitably take some risks. All the great entrepreneurs will tell you that they have taken major risks throughout their careers, but they have survived mostly by being canny and calculating about which risks to take. So how can you avoid being foolhardy and only proceed along the paths that are the safest? What will make it easier to calculate the risks and choose the ones most likely to be worthwhile?

Know Your Business in Detail

Perhaps the most important thing is to have an intimate knowledge of your financial starting point at the time you need to make your decisions. Unless you are completely familiar with what cash you have available, the liabilities that will deplete it and the expected revenues, your business decisions could do more harm than good. Outsourced bookkeepers can help, and it’s a wise entrepreneur who discusses plans with them before making commitments.

Do you know the number and value of your average sales transactions per week or month? What have you and your staff done to make this happen? Could there be a way to bump up the numbers without it costing you too dear?

What marketing strategies have you been using? What tactics have worked well in the past? What does your market respond to? What has been the response rate and the conversion rate? What might you change to improve things?

Work out your Needs and Their Cost

You also need to be sure about what it will cost to take a particular route, and be able to predict the long term benefits. Do you need to recruit new skills, and how much will that cost you in both acquiring and retaining these personnel? If you don’t know the answers to all these sort of questions, how can you be certain it will be worth it?

If you don’t already have all this information at your fingertips, now is not the time to move ahead with development plans that could end with you falling flat on your face. Postpone your activity and talk to your bookkeepers about how much historical information could be made available, and make sure that they collect and report on all the data you will need from now on.

With the right information, you will be able to develop reachable goals and plan what risks are the safest to take as you strive to achieve them. As you tick them off, you will have the enviable satisfaction of seeing your business thrive and grow.

The Role of Local Enterprise Partnerships

How much help do you get from your Local Enterprise Partnership (LEP)? Are you confident that you can get the advice and the services you need from it? Do you and other small businesses in your area have a voice in local business strategy of your LEP?

What The Federation of Small Businesses (FSB) Thinks

Your bookkeepers are aware of one of one of its recent reports, which says up front that LEPs must engage more with small businesses. Consulting more effectively with them would help them encourage and make the most of local growth opportunities. The recommendations of the report include LEPs having a small business sub-group and a stakeholder relationship manager to make sure that the needs and ideas of local small organisations are brought to the attention of the LEP. A board member with the relevant background and experience should also be appointed to hold specific responsibility for small business issues.

The report follows a survey of LEPs, Local Authorities and small business representatives. Of the 39 LEPs currently operating, 36 responded, as well as 131 local authorities and business people. The FSB conclusions are that LEPs are hampered by a lack of government clarity about their role and mission, as well as by inadequate funding and staffing. Its report therefore also makes recommendations to government.

A fascinating graph covers types of LEP activities to support small business competitiveness that are currently available, and the considerable amount that that falls short of what a) local authorities and b) the FSB think they should be offering.

Why the Small Business Sector is Important

It points out that ‘small and medium sized businesses have been responsible for four in five (84%) jobs created in the private sector between 2010 and 2013, and represent almost half (48%) of private sector turnover. Yet the report finds that large businesses are perceived to have most influence within LEPs.

According to FSB National Chairman, John Allan, "LEPs are crucial to delivering local economic growth across England. While some have done a good job of reaching out to the small business community, others need to up their game. Small firms will ultimately be the ones creating most of the jobs and prosperity in the private sector, so it is absolutely essential that they are at the heart of all LEPs thinking and plans.”

So how much do you and your outsourced bookkeepers know about your local LEP? Is it time to find out more and become proactive in lobbying for the changes that are needed?