Interestingly, only 0.7% of all UK firms export to the EU, according to Brexit Facts4EU.org and its research on and analysis of official HMRC and Government data. Even when excluding sole traders, only 2.8% of business export to the EU, with some 39,000 out of a total of 5.9 million ‘business’ actually selling goods to the 27 member states of the EU.
Perhaps even more interesting, is the fact that there are only 19,800 businesses in the UK employing 100 people or more, leaving just under six million ‘businesses’ – sole trader, micro and SME’s who employ the rest.
This article is not about Brexit however, it is about highlighting and encouraging British firms of all shapes and sizes, especially sole trader, micro, SME and family firms, to take advantage of the huge potential market outside the UK and EU for British expertise, services and goods.
There are significant business benefits from developing an international footprint, not least the risk mitigation it affords to dependence on home markets, seasonal fluctuations, demand cycles and potential economic downturns and instability in one country, region or market.
At GENCOM we are passionate about promoting British business internationally, and in supporting and encouraging British SME’s to look internationally. Successfully developing and capturing international business requires care and carries risk as well. So, a considered, SMARTER, strategic, tactical and operational approach is critical.
As a quick starter for ten, we would recommend that firms thinking about conducting international business consider the following;
• Geostrategic intelligence – know and understand the world, the region and the country you are seeking to enter. Understand the macros and micro ecosystems in which you will be operating.
• Strategic business planning and intelligence- research, analyse and assess both the country and market, in depth. Ensure that you really understand and conduct not just strategic and operational business planning, but the wider in region and in country operational framework. It is important that you understand the society, culture, regulatory, legal environments and infrastructure, amongst others.
• Within this planning, ensure that your market research is deeply rooted and properly understood, both ways. Is there a demand for your services and goods, are they properly understood and what will mark you out?
• Risk – embedded within you strategic and operational planning should be a dynamic, response risk analysis and assessment.
• Have you deployed pathfinding presence? Have you, a trusted member of your team or partner actually burnt old fashioned shoe leather on the ground seeing at first hand the reality of potential opportunities and operations>
We can call the first four points above phase zero. Time spent in recognisance and planning is never wasted, and at the end of phase zero you should have a clear go / no go decision, which if positive, provides you with a first green and solid foundations from which to lay your new business adventure.
Turning to Phase One, we can think about this as an initiation stage. Critical here is to be honest and open. In essence Phase One is about feasibility and business case. Crucial he e is an open and honest understanding of the following:
• Risks – both to new venture and to wider organisational interests and stakeholders
• Challenges and issues to be faced
• Rationale and reason for new venture
• Expectations, outcomes and results
• Key leadership, personnel and team
• Initial resource assessment, timeframes and milestones
• Decision criteria
When all of the above have been explored, analysed and assessed they should be presented as a business case for the new venture, Critically, remember that your new venture must be founded upon a positive business case that delivers tangible and sustainable business benefits, results and outcomes.
Within the business case, it is advisable to present an options analysis, whereby different options are presented, assessed and ranked, with a recommended way ahead clearly outlined.
At the end of this stage, all things being favourable, you should now have two greens.
Finally, in Phase Two, we can now focus on the operational implementation planning. Remember it is critical to be pragmatic, practical and business focused. Project manage your implementation planning professionally. Again, like phases zero and one above, this will take time, but the solid foundations laid will significantly enhance your potential success.
Take a mission assurance approach here – how do we assure that operationally we lay the best, fit for purpose, foundations for success.
Key issues here include:
• Scope – don’t start too big! What is the smallest, most agile, lowest risk and lowest resource operational infrastructure you can launch with, that is fit for purpose? You can then and then develop and grow over time if successful?
• Terms and reference and buy in – do key stakeholders – your board, senior leadership team the organisation generally and value chain stakeholders- understand, buy into and have clear excitations of what you are trying to initially achieve?
• Do you clear phased approach and milestones in place?
• Resources – time, people, finances are critical – are they securely in place? Don’t underestimate what you may need, and in planning professionally ensure that you have contingency and spare capacity in place. You can always, and indeed should, adjust and lower such contingency and spare capacity planning in a phased and structured manner, but initially ensure that you have room to manoeuvre.
• Secure expertise and experience – not just from potential external partners, consultants and advisors such as GENCOM, but in country. Have you identified a potential in country partner? Do you need one? Can you draw on in country expertise such as British and other business groups? Can you secure in country talent?
Such expertise and experience is mission critical as it can radically reduce the risk of things going wring and of ultimate failure – which could not only be financially worrying but may have unforeseen impact on and consequences for your wider business.
• Think and plan SMARTER! If you are not sure what this is and what the benefits are, ask us! At it’s heart those such as SMARTER strategy revolves around your organisation’s ability to be agile, responsive and intelligent, so enhancing decision making.
By the end of phase two, you should, if all goes well, be in a three greens position and ready to execute.
For SME’s there will probably be a feeling that such as structured and systematic approach is too bureaucratic and time consuming, even if we had the in-house expertise and experience. Such thoughts are natural, but alas such structured and systematic planning is critical and will significantly reduce risk and enhance success.
So, let’s make 2021 onwards the roaring twenties, and see and explosion of British SME’s enjoying the fruits of successful international business ventures.