By Mark East, Partner at Moore Thompson
Many misconceptions about international trade are commonly shared, which can often prevent smaller businesses from seeking new opportunities overseas.
However, you should not let them hold your business back from reaping the rewards of foreign markets.
Over the years I have worked with numerous clients expanding their businesses into different international markets – helping them to understand the true benefits and risks.
As such, I am aware that there are several myths, which I think it is important to dispel by examining the realities of overseas trade.
Myth 1: International trade is too risky
Small-to-medium enterprises (SMEs) are often worried that trading across borders is dangerous and risks the financial security of the business.
But, in today’s interconnected world, this is simply no longer the case – in most instances.
Modern international trade operates under strict laws and regulations and, with numerous trade agreements in place across the world, the chances of your business running into financial trouble is low.
However, it never hurts to take the right precautions by conducting thorough research and working with experienced experts who can support your trade expansion.
Myth 2: International trade is too complicated
You may feel that getting involved in international trade is too complicated, but this couldn’t be further from the truth.
The standardisation of regulations and laws – as mentioned above – has made the process of international trade far more straightforward.
Even with the added complexities of Brexit, there process of trading internationally, once established, becomes a normal part of your business’s activities.
Access to international advisors, accountants and tax experts has also never been easier due to the advent of technological innovation and online communication.
Real-time advice that keeps your business compliant with international law is now often only a click or a phone call away.
Myth 3: Only large corporations can succeed in international trade
The misconception that only large corporations, with abundant resources, can venture into international markets, is one that I have seen hold back a lot of smaller enterprises.
However, SMEs often have the advantage of agility, allowing them to target niche markets more effectively than larger corporations and adapt quickly to consumer preference changes.
In addition, smaller companies can more easily forge partnerships and collaborations with local businesses in foreign markets, bolstering their presence and increasing their competitiveness.
I have personally assisted SMEs in leveraging various Government grants and subsidies, aimed at encouraging international trade, to great effect, boosting their profitability enormously.
Myth 4: Language barriers hinder business
In my experience, some SMEs fear that language barriers will impede their ability to succeed in international trade.
In fact, in most international business settings, English continues to be a widely accepted lingua franca and is the most widely spoken second language in most countries.
It is estimated that 1.1 billion people speak English globally, roughly 15 per cent of the world’s population.
Advances in technology have also made translation apps accessible, facilitating real-time communication. In the worst-case scenario, translation services are also readilyavailable and inexpensive.
Myth 5: SMEs don’t have the resources for international trade
You may feel that your business lacks the capital or the staff numbers to participate in international trade but, again, this simply isn’t the case.
According to some estimates, 67 per cent of internationally exporting companies have less than 20 employees.
With the interconnected postal services of the international market – companies like DHL, UPS, etc. – sending and receiving goods and services has never been easier.
Even if you have larger shipments, many freight agents can help SMEs with their exports, including assisting with the challenges of customs.
If you are a primarily service-based firm, international business may be even simpler thanks to the plethora of secure and efficient web platforms that can enhance your communication and collaboration with international clients.
As you can see, multi-national trade has never been easier. With expert financial advisors who operate internationally, getting the right guidance is also quick and simple.
To learn more about expanding your business internationally, please get in touch with our experts.