Journal Column – Bridging the scale-up gap with new markets
Posted on the 10 March 2016
The looming EU referendum raises an interesting question for businesses; will we retain free and instant access to 500 million of the world’s wealthiest consumers or will we need to look further overseas to sell our good and services? Whatever happens when the votes are counted, the trade deals the Government signs us up to are just one element businesses need in order to access new customers.
Over the past decade the nature of British exports has changed dramatically. Since the global financial crisis we’ve exported more to countries outside of the EU than to those within, and over this period our fastest growing markets have been non-EU. However, with access to half a billion people on our doorstep, Chinese growth slowing, and instability in the oil market it is unsurprising that the majority of business owners wish to remain part of the union.
In The Scale-Up Report, serial entrepreneur and angel investor Sherry Coutu highlighted that inability to find new customers, both at home and abroad, can prevent businesses from scaling up. The fact that just ten percent of scale-up businesses currently export shows us two things; that thousands of companies in the North East are missing out on potentially huge rewards from foreign markets, and that they need information and support to sell their goods and services overseas.
Another very important factor Coutu mentioned is how regulation affects the ability of our scale-ups to compete internationally. She stated that scale-up businesses in the UK struggle to gain regulatory approval for innovative new products, which puts them at a disadvantage to similar companies in less heavily regulated countries. Conversely, with the referendum in mind, it can be argued that our full emersion in the European regulatory ecosystem gives us an advantage over non-EU companies when selling on the continent.
Help with the logistical element of exporting is readily available. UKTI’s Exporting is Great website lists thousands of opportunities, from selling military drones to marketing services. There are trade missions to countries around the globe promoting British products, although Coutu does note the need to include more scale-up companies in these.
Research conducted by the Entrepreneurs’ Forum found that for our members, accessing new markets is second to only the skills gap when it comes to issues preventing growth. To maintain growth when the market you’re in reaches the point of saturation you need to move into a new geographical area, or reach out to a different segment in the area you’re already in; both of which necessitate changing the way you sell your product, changing your product, or both.
When the cultural and logistical barriers to entering new markets have been overcome, it is often the case that internal barriers still need to be tackled, and these may be the most difficult of all, as they are the ones we put up ourselves. As individuals and organisations it is easy to find reasons not to export or make the changes that would facilitate this, even in the light of the potentially huge rewards on offer.
The Entrepreneurs’ Forum knows that when it comes overcoming the issues that prevent a company from making the leap into exporting, the support of those who have done it before can be invaluable. Businesses can benefit from support in breaking down the necessary changes into manageable steps and implementing them, and from the moral support of knowing they can call advice and reassurance from experienced exporters.
When it comes to exporting, as is the case with all business support, there are no stupid questions, just stupid answers, so entrepreneurs looking to expand into new markets should have nothing to fear when asking for advice.Please note: This article was published in The Journal 10/03/16