Don't delay, export today - the impact of the Brexit vote08 Dec 2016
QBE Business Insurance's David Hall, Managing Director for Retail goes discusses the impact of Brexit for Exporting Britain, and how their new report reveals that the demand is there for UK business to take advantage of.
An uncertain exporting environment has developed in the UK since the Brexit vote. A sense of hesitancy has fallen over businesses who would have otherwise tapped into overseas markets. However now, more than ever, there are a host of opportunities and advantages to exporting.
The uncertainty around what will or won’t happen due to Brexit continues to hang over the business world. The part we know for sure, is that we will know nothing until Article 50 is triggered and negotiations start. In the meantime, the market conditions for exporting have significantly moved in the favour of the exporter.
The market is extremely buoyant. With the drop in the pound, UK goods and services are an attractive proposition for international buyers. This has worked in favour of existing UK exporters, who are reaping the rewards. For those considering exporting, many have held back for fear of the unknown trade agreements yet to be established, and the subsequent impact on their business in a post-EU world.
Establish yourself as an exporter
To flip the scenario on its head, current market conditions are a perfect place to commence exporting. Now is the time to get set up and established. Following Brexit we will expect to witness a period of fluctuations, which will take some time to settle down. Even before that, between Article 50 being triggered and the actual exit of the UK from the EU, the UK will face an unpredictable marketplace. Businesses waiting to export products or services could miss out on years of potential opportunity.
MOJO Skin and Hair Care Limited is a business that planned to export from the outset. Founder and CEO Paul Adrian has a positive approach to exporting and believes that companies should be proactive. He told us that “a lot of companies don’t export, and think they should build their brand here for five years first. But exporting from day one improves cash flow, and helps to fund the business.”
A lot of focus is currently put on the relationship between the UK and EU, but we are part of a global marketplace. The opportunities outside of the EU are just as important for UK businesses. Paul Adrian told us that he found more success in the US and India due to the demand for premium British products, but found Europe to be ‘difficult’.
Businesses have a great opportunity to realise their exporting ambitions now. Not only is the market open to receive more UK exports, the current trade agreements are agreed – you know what you are getting yourself into. Entering a new geographic marketplace is simpler with tried and tested agreements and processes in place, as the risks can be more easily managed.
Managing business risks
Knowledge and understanding of exporting can go a long way to helping mitigate risks. Companies are understandably both excited about accessing a larger marketplace that can increase profits, but also apprehensive about the challenges.
By creating a solid, well-thought out plan and seeking professional advice, businesses can increase their awareness and ensure they have the best possible start to exporting. There is plenty of help for companies too, from the Department of International Trade, to trade associations and businesses like QBE.
We all recognise the market conditions will change as the UK goes through the period of untangling itself from the EU. Adapting to these changes will take time, but will be much quicker once you have experience of exporting and have established yourself in this market.
With the government focus on encouraging businesses to export, a doubling of UK Export Finance’s capacity was unveiled in the Autumn Statement, there is a wealth of information to support and guide companies. QBE offers risk advice for businesses considering exporting in its guide launched in November 2016.