Weak pound is strong incentive to export

By HELEN LOVELESS, MAIL ON SUNDAY ENTERPRISE EDITOR
Updated:

 

Businesses looking for ways to grow in the downturn are being encouraged to look to export markets, with the weak pound just one advantage for firms trading abroad.

Mike Tennant

Eye on export: Mike Tennant from Tavcom Training accessed the free advice available.

Month-on-month exports rose by 2.5% to £18.9bn in February, official figures show.

John Dunsmure, managing director of the British Chambers of Commerce, says: 'Many companies are very concerned about their future and, whilst we are not celebrating sterling's fall, there could be competitive advantages in exporting at the moment. While growth projections for many of the UK's traditional export markets may not be as strong as in the past, opportunities do exist in these markets and further afield.'

Brent Goldman, corporate finance partner at accounting group BDO Stoy Hayward, agrees. 'Given the recessionary climate, diversifying into other markets will help to reduce the risk to businesses,' he says. 'The fall in value of sterling also makes UK exports more attractive and creates a better opportunity to develop new relationships where price may have previously been a barrier.'

However, experts warn that firms must do their homework. Researching the planned export market carefully is vital, as is a realistic analysis of the potential costs of investing in new markets and currency fluctuations.

Mike Tennant runs Tavcom Training, in Bishops Waltham, Hampshire, which offers training on how to install, operate and manage security systems.

With his business established in the UK, Mike, 64, was keen to expand further afield and was particularly interested in the United Arab Emirates and the US export markets.

Realising that he needed help to assess their potential, Mike contacted the Export Marketing Research Scheme of the Government organisation UK Trade and Industry, which offers free and independent advice.

He says: 'We saw export as a clear route to further growth and as an important contingency in case our market in the UK suffered a downturn.

'But we wanted to be sure we were approaching this in the right way.'

After visiting the US and the UAE on research trips, Mike realised that the cost of operating in the UAE was too great at the moment, but he is in the process of setting up an office in the US. He also exports his training courses as far afield as South Africa and Kuwait.

Mike received support through UK Trade and Industry's Passport to Export scheme, which offers 'new and inexperienced' exporters free capability assessments, support in visiting potential markets and subsidised training, as well as a business mentor.

For experienced exporters, UK Trade and Industry runs a free service called Gateway to Global Growth, which offers firms a strategic review as well as planning and support to help grow their business overseas.

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