Writing for Business Advice, Mark O’Connell, CEO of foreign investment firm OCO Global, issues a call to action for small UK exporters to seize opportunities in North America and reignite the special relationship.
Regardless of the details of any future trade deals between the UK and EU, Brexit could be the spark that ignites greater interest in opportunities in North America from UK SMEs.
Much has already been written and said about the significant untapped opportunities across the pond, but the current uncertainty about arrangements over tariffs and standards in EU markets is prompting many to look further afield for opportunities for growth.
Let me put this into perspective – OCO Global is currently working with a UK dairy cooperative – which is considering the US market, to combat the offset flatness in the current UK grocery sector. The US butter sector is worth $208bn and growing, plus even with transportation, currency exchange and import tariffs factored into the mix the price per ton of butter in the US is double that of the UK.
The business and economic benefits of exporting are pretty clear. Currently, only 11 per cent of small UK businesses export, yet the latest FedEx Express Export Report 2017 revealed, for example, that exporting revenues account for 65 per cent of total revenue for SMEs that are exporting. In many cases, diversifying an export portfolio can allow for an increase in both sales and business stability.
A wider base of customers and distributors connected to export and not just tied to the domestic market results in a more resilient business that is able to weather downturns in one or more markets, or offset quieter seasonal periods in one part of the world. Additionally, exporting exposes a business to new ideas and supports innovation.
However, entering any new market is a daunting prospect and there are undeniably a number of factors which hold companies back. Despite the arguable cultural and linguistic similarities between the UK, US and Canada, for example, success with a product or service in one country does not necessarily translate into another.
Tesco Fresh and Easy, for instance, is one of the most high-profile failures of a UK business attempting to enter the US convenience store market. The location, timing and offer all failed to translate to the highly dynamic US grocery market.
Add to that the different laws and regulations which need to be navigated, a potential lack of local contacts and relationships, and naivety about how long it might take to get traction with a product or service, and it’s not surprising that some companies don’t go the distance.
However, it is certainly possible. Often it is the strength of the relationship which is most important for success.
In the last 12 months, we have supported more than 100 UK companies aiming to identify and define opportunities in the US and Canada and develop focused strategies on how to access them or to expand on what they are already doing. One of the companies we have worked with is Jumpack, a producer of lightweight jump ramps for skateboarders, which can be carried as a backpack and deployed anywhere.
The company wanted to make some local connections to help facilitate the export of their product to the US. Ahead of a trip to California at the beginning of this year, we organised meetings with potential brand-ambassadors and distributors. After meeting a pro-BMXer who is now their US brand ambassador and several distributors from the North American Skateboard industry, Jumpack ultimately secured a global distribution deal.
From our perspective, there is a lot to be optimistic about. British exporters have more options than they realise. In many foreign markets, there is huge demand for the “Made in Britain” label. We recently announced an exclusive partnership with the Department for International Trade (DIT) to support UK companies as they explore expansion opportunities in North America.
The DIT’s established Exporting is GREAT campaign helps businesses find opportunities in the private sector, through trade portals, matching services such the “Find a Buyer” scheme – which links UK companies to buyers overseas – and through the international connections we ourselves help to broker.
The EU is, and will remain, an important trading partner for the UK after Brexit. But our message is simple: don’t miss out on opportunities a little further over the horizon.
Mark O’Connell is CEO of foreign investment firm OCO Global
A majority of small business owners now favour “Norway option” EU deal
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