Trade credit insurer Atradius is urging UK businesses to commit further
resources and investment to exporting in spite of a low level of growth
so far in 2015.
According to the latest Overseas Trade Statistics from HM Revenue & Customs (June 2015), although exports to the US and China were up, the value of UK exports decreased to £26.4bn in April compared to the previous month.
Survey results from the Confederation of British Industry (CBI) released at the start of July show that exporters face real challenges, especially from the impact of a stronger pound against the euro and a still-weak global exports market. However they expect growth to pick up during the rest of the year.
Marc Jones, head of sales at Atradius said: “The UK has sadly lagged behind the European average for export growth and also carries a negative balance of trade, boosting export growth will have the dual benefits of improving both the economic environment and the investment environment. This will lead to more jobs and output and also increase the exporters’ own individual market and growth potential.
“Against a challenging geopolitical environment, export opportunities still remain across Europe and the Americas and also in Asia, where there has arguably been the greatest increase in opportunity. As individual economies recover further, exporters shipping successfully now will be in pole position once full global economic recovery returns.”
To increase their export potential, Atradius suggests that companies need partners to assist them in overcoming trading hurdles. As a trade credit insurer, as well as providing cover, Atradius also provides companies with the opportunity to tap into information, knowledge and experience. Accurate information helps make credit sale opportunities clear and transparent, allowing exporters to deliver a competitive proposition to their customers at a time when credit demands on them are increasing.
Marc Jones added: “In the UK we have some very successful exporting industries and a reputation that keeps British goods in demand – people want to do business with us which means that the door is already open. Machinery and transport are two key examples of success with over 40 per cent of all UK exports shipped from these sectors.
“Manufacturing is also significant at just under 24 per cent and chemicals and chemical products also have a strong export portfolio. These sectors are seen as hugely desirable particularly in the US and Asia. The export of luxury and niche goods, bespoke technical services and educational services is also growing rapidly.”
To assist businesses who are seeking to export into new markets, Atradius offers the following tips:
- Look for markets which possess similar characteristics to your domestic market, which will help you manage the transition into exporting within new territories.
- Be familiar with the political and socio-economic situation in the country you are trading with as well as the cultural trading differences. Developing relationships with foreign embassies, trade bodies and business forums will help build knowledge of local trade customs and legislation.
- Do your research: identify target customers and assess the market size, potential share and trends in consumption in advance. Consider the competition and if this leaves a window of opportunity for new business.
- Set realistic objectives on volume, revenue growth and profitability, and understand that success through exporting will not happen overnight.
- Check the financial position and credit history of your potential customer before you do business with them. Reviewing financial information should be done prior to establishing a relationship but also at regular intervals so that any discrepancies in behaviour or payment are pinpointed at an early stage. If you don’t have the resource in house, outsource it.
- Look for warning signs: closely monitor customer behaviour, paying particular attention to order cancellations, extension to payment term requests or rescheduling of payments; these could all be warning signs to suggest the business is experiencing financial difficulty.
- Protect yourself: not only does trade credit insurance protect you from the risks of not getting paid it also provides customers with invaluable professional help and advice on individual companies and overseas markets. This includes in-depth economic forecasts and regular updates on local trading conditions from on-the-ground intelligence teams including local collection teams.
Atradius has business intelligence on 200 million companies worldwide and with experts on the ground in 50 countries worldwide Atradius is in the perfect position to support its customers as they expand their trading horizons. The trade credit insurer can trace its history back to almost a century ago to when it was set up by the UK government to inject an economic stimulus to the British export scene in the aftermath of World War I. Today, as a private sector company, Atradius continues to protect exports for thousands of UK businesses sending their goods or services to all corners of the world.
(Source - Atradius Press Release)