It’s a big world out there, how much of that would you trade with?

With the growth of e-commerce and increased complexity at borders in recent years, businesses have undergone major changes. The pandemic, conflict in Ukraine, and Brexit have caused a complete disruption of supply chains, resulting in a significant increase in shipping costs and a plethora of regulations for moving goods to the EU. International trade can seem overwhelming for small and medium-sized enterprises in the UK. 

While it is important to be aware of potential risks and challenges in international trade, it's equally crucial to focus on the benefits and opportunities it presents.  

For business leaders with aspirations to grow, entering the global market can be daunting, but the rewards are too significant to overlook. Domestic trade may feel safer, but expanding internationally can make your business stronger, more successful, and more profitable.  

It’s time to consider the potential advantages of international trade. 

• Increase your revenue 

One of the major advantages of expanding your trade internationally is the opportunity to reach more potential clients. Every new country you add to your list can provide a new avenue for business growth and increased profits. 

• Open up the Competition 

In the UK, your products and services may face tough competition as it is a crowded market. However, you may discover less competition in other countries where citizens are excited to have access to your offerings in their local area. 

• Make your Product Lifecycle longer 

Sometimes, customers stop buying certain products or move on to upgraded versions, causing a dip in sales within the domestic market.  

Selling those products to an overseas market can prolong the life of the product, as it may still be in high demand in emerging markets. International trade offers the advantage of additional outlets for disposing of surplus goods that cannot be sold in the home market. 

• Better Cashflow Management 

International trade can offer the benefit of receiving payment upfront. Negotiating payment terms with vendors may differ when trading internationally, as it is common practice to ask for upfront payment. This is unlike the practice at home, where payment may be delayed. Expanding your business overseas may help you better manage cash flow. 

• Risk Management 

A significant advantage of international trade is market diversification. Relying solely on the domestic market can increase your exposure to risks such as economic downturns, political instability, and environmental events. By expanding to other markets, you can reduce your reliance on one market and potentially decrease risks in your primary market. 

• Make the most of Currency Exchange 

You could take advantage of currency fluctuations if your company engages in international trade. For instance, when the GBP is low, you could export more, and foreign customers could benefit from the favourable currency exchange rate. Moreover, you could benefit from currency conversion.  

Imagine you do business in the US, and the US dollar is performing well against the GBP. This means that when you convert payments in US dollars to a weak GBP, your head office in the UK will receive more dollars. This advantage alone could be one of the most valuable benefits of international trade. 

• Build your Reputation 

The success of your business in one country can have a positive impact on adjacent countries, boosting your credibility both at home and abroad. While this advantage of international trade may be difficult to measure, it should not be overlooked. 

• Opportunities for innovation and specialisation 

Exploring international markets can offer opportunities for introducing new services or products. Being exposed to the realities of the world outside your home base may spark innovations, upgrades, and efficiencies for your existing products and services. 

Businesses have learned a valuable lesson from the pandemic: to be ready for change and challenges and not rely on a single source for success.  

To thrive, businesses of any size, including small and medium-sized enterprises, should seriously consider expanding globally instead of focusing on their local market. It is particularly crucial at the cost of living crisis with high inflation and decreased customers’ purchasing power. 

While there is so much beauty in doing business internationally, small and medium-sized enterprises are advised to take a step back and get expert advice to supplement their own knowledge. That’s where The Global Scale Up programme of GC Business Growth Hub (BGH) comes in, bringing together leading partners with global networks to provide Greater Manchester companies with the essential support for getting ahead in the international arena. 

“Life as an entrepreneur is a roller-coaster of emotions, especially for a start-up operated in a business where the existence of the market is still unproved,” said Amman Ahmed, founder of Music for Pets. “Having BGH as our partner in the global arena provided us with access to a team of experienced business advisors who can always guide us in the right direction.”    

"The growth company has been really supportive for us as a business as we have hit different stages in our development,” said Ben Findlay, Co-founder of Machine Compare. “The Global Scale Up programme and the connections to experienced people have helped us focus on what is most important to our growth and success.” 

Are you thinking about taking your business to the next level and going global? Check out our fully funded Global Scale-up Programme - enabling companies across the whole of Greater Manchester to rapidly expand into multiple markets all over the world. 

Apply Now >>> Global Scale-Up Programme | GC Business Growth Hub