This post is written by Linda Kozlowski, Director of Global Marketing and Customer Experience for Alibaba.com.
With many businesses feeling the impact of the current economic uncertainty, it’s no surprise that the outlook for 2012 is less than rosy. Without a positive change in economic conditions, many small and medium businesses, particularly those that operate with small teams and limited resources, could cease trading altogether. More than ever, reducing operating costs and driving revenues are essential to survival. It will be the savvy businesses who are willing to adapt their approach that will come out on top.
One obvious way of finding new revenues is to diversify your product or service offering and grow your customer base. To this end, all businesses should be considering how they can expand beyond the UK to exploit opportunities in overseas markets. Businesses yet to embark on international trade often overestimate the difficulties and underestimate the payback. Largely thanks to the internet, opportunities have never been more abundant or varied. Small and medium sized businesses can now find all kinds of goods and supplies that are simply beyond the reach of those who largely operate offline.
Breaking down barriers
Language barriers and trust issues are most often perceived as major inhibitors to overseas trade, yet thousands of UK SMEs have already taken the leap and regularly communicate and do business with overseas partners through a mixture of instant messaging and email. Many also exchange photographs and video to better illustrate their requirements, especially when more complex dialogue is required.
The global adoption of online business tools has enabled all businesses, however small, to reach out, connect and trade easily and securely online.
By searching online and using trading platforms like Alibaba.com, businesses can quickly and easily connect with suppliers and manufacturers across the globe, significantly reducing their sourcing costs. Equally, for businesses looking to export, these platforms offer free access to a world of buyers who are just a couple of clicks away from finding you.
As the recovery in UK export markets strengthens and sterling’s past depreciation boosts UK export volumes, the UK’s net trade is forecast to contribute positively to the growth of our economy. The EU currently accounts for around half of UK trade, another quarter with the developed world and the remaining with emerging economies.
Whilst businesses must continue to focus on trading with key European countries such as Germany and Turkey, the current problems with some eurozone economies continue to present major risks to UK businesses. As a result, many forward-thinking businesses are embracing the fast-growing BRIC economies of Brazil, Russia, India and China, which currently have a much greater buying power.
What’s more, countries in the Far East are experiencing rapid growth and British goods, in virtually every sector, are in demand thanks to their high quality and sophistication. UK businesses must capitalise on this and be more ambitious in developing new markets.
The government has promised to support small and medium businesses by maintaining the global network, re-focusing resources and working closely with UK Trade and Investment (UKTI) to align the UK with key international trade partners. This is essential if we are to win exports and create jobs for the British public, and businesses need to take advantage of incentives on offer.
However, opportunities to drive additional revenue don’t stop with exports. Everyone can benefit from finding lower priced, better quality products/services and keeping costs down is a simple and effective way of driving up the bottom line. Integral to getting the most competitive deal is sourcing the right supplier.
Small businesses need not be cut off from the global marketplace or feel that international business is only for big companies – trading abroad can be the path to greater security for your business as well as a channel for growth and success. For many, the rewards reaped from a smart international trading strategy can transform their fortunes forever.
Alibaba.com will be speaking at the Global Entrepreneurship Week Go Global event on 15 November, and Alibaba.com representatives will be offering advice and support throughout Global Entrepreneurship Week from 14 – 18 November.
[Image: David Castillo Dominici]