According to the most recent ONS Business Survey, 11% of UK Small to Medium Enterprises ( SMEs) were exporters in 2021, accounting for around a third of all UK exports, worth close to £200 billion for the British economy[1].
As your business expands, you may venture beyond domestic borders, driven by your growing ambitions. Internationalisation unlocks exciting new markets, diversifies revenue streams, and fuels further growth. However, this expansion requires careful financial planning and strategic resource allocation.
So why do businesses look to expand internationally, and what are the benefits?
- Expanding into new markets and customer bases to decrease dependency on a single market and mitigate the risks associated with economic downturns through diversification across multiple markets.
- Potential access to cheaper resources, such as labour and materials.
- Innovation increases by exposing businesses to different cultures, ideas and business practices.
Overall, expansion fosters growth, increases profitability, and builds resilience against market fluctuations. During a recent panel session at our London headquarters in partnership with the Hungarian British Business Alliance, we discussed the following key factors that should be evaluated when considering international market expansion:
Market research
To help grow or build your export business, you must customise products to meet the needs and preferences of target markets by considering cultural, regulatory, and technical requirements. It is vital to consider the risks involved in entering a new market.
Strategic partnerships
By building relationships with local agents, distributors, and strategic partners, your business can better reach and access your target market. To support your expansion efforts, ensure you allocate the appropriate resources and that your team fully understands how your product fits into the region.
Brand building
Brand building is crucial when scaling into new markets as it establishes recognition, trust, and loyalty among new customers. A strong brand differentiates a company from competitors and enhances its reputation, making market entry smoother and more effective. In order to be effective, consider tailoring marketing to local audiences, forming local partnerships, and engage actively with prospective customers in the new region.
Supply chain management
You should always test the market to understand the market's appetite for your product or service. It is also important to streamline supply chain operations, from reliability and cost-effectiveness to product delivery.
Developing or refining an export business strategy can be a demanding process, yet it presents significant growth opportunities for businesses. Investing time and effort in market research, strategic planning, brand development, supply chain management can set a solid foundation for success.
If you're looking to scale into new markets, IFX Payments offers both currency exchange and cross-border payment solutions to support growing businesses. With our solutions, you can confidently navigate the complexities of international expansion, helping your business thrive. For more information contact us by clicking below.
[1]ONS, Annual Business Survey exporters and importers, 2023: [https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/datasets/annualbusinesssurveyimportersandexporters]
