Challenges and opportunities facing businesses in Kent trading internationally

Challenges and opportunities facing businesses trading internationally

Darren Rigden, Partner, Audit
20/06/2019
Challenges and opportunities facing businesses in Kent trading internationally

On 16 May Crowe ran a second export and import discussion group for businesses which trade internationally. The theme of the event was ‘expanding overseas’ and looked at the risks and opportunities arising from disruption to international trade.

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Optimism despite uncertainty

21 owner-managed businesses from various sectors including transport, food, manufacturing and life sciences attended the roundtable event. There was a consensus that while there was caution around the on-going uncertainty caused by Brexit, there was cause for optimism as well, particularly in certain sectors such as the automotive industry.

Brexit: an opportunity?

Although the issue of Brexit remains a challenge to the companies which export, primarily owing to how and when it will take place, many also saw the UK’s departure from the EU as an opportunity to re-focus on their business models and to develop new customer bases outside of the EU. That said, many still feel that the on-going negotiations are proving to be a distraction, which is causing a degree of hesitation in the region. Additionally, some are spending valuable resources on shoring up their EU trade that they already have in place, instead of using the time and resource to explore new markets and expand their businesses.

The export and import group also agreed that much of the growth in overseas markets was coming from outside the EU with areas such as India and the Middle East being key areas of opportunity. Whilst these bring new and unique challenges in comparison to established markets in the US and Europe, they are proving to be lucrative and the time spent entering these markets was considered worthwhile.

Other challenges: currency, staffing, regulation and technology

One challenge on the horizon is currency movements. The businesses acknowledge that Brexit had been good for exports as this had weakened the pound making exports from the UK very competitive. However, it was thought that this had effectively created a positive ‘bubble’ and that this could burst if the outcome of Brexit results in the pound strengthening, which of course would be good for importers.

Staffing was also noted as a problem as it was felt to be harder to recruit and retain people from the EU. This was particularly noticeable in the manufacturing and agriculture sectors, which historically have both employed high number of EU workers. This had been addressed in some cases by companies taking on more UK-based junior members of staff and investing in their training. This had the disadvantage of taking time, but had the advantage of resulting in better skilled people who knew the business and who also had increased loyalty to the company as it had supported them through their training programmes.

A key challenge for new markets was understanding and complying with regulations in new countries, especially in certain sectors, for example for the sale of medical devices or chemicals. However, it was recognised that technology has helped with research ahead of entering new markets, along with third party advice. This includes information from government websites, as well as additional support and resources, which have been specifically set up to encourage increased exports.

Technology is also helping on several levels over and above researching markets. Mobile applications designed for smartphones for example are helping with translation and communication and had helped significantly, along with the use of Skype and similar software programmes to cut down on travel times.

The consensus among British businesses seems to be one of cautious optimism. One of the attendees summed up the most common feeling, stating:

“We just need to know how Brexit will pan out so that we can plan for it, move on and then start exploring new market opportunities.”

 

 

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Darren Rigden
Darren Rigden
Partner, Audit and Business Solutions
Kent