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enturing overseas can provide British businesses with a wealth of new opportunities – but Dalip Puri, Head of Multicultural Commercial Banking at HSBC, cautions that preparation is essential. As operating in the UK continues to pose challenges to businesses and the cost of suppliers, services and skills become more expensive, businesses will increasingly look abroad for opportunities this year. Research from HSBC Commercial Banking found that, of businesses expecting to grow over the next 12 months, almost half believe they will need to trade internationally to make that a reality. Venturing overseas can provide British businesses with a wealth of new opportunities and potential for increased profits. As a first step, businesses need to do substantial research into the information and expertise they need to do business outside the UK. From an understanding of currency and payment terms, to awareness of the language and etiquette, preparation is essential.
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Fundamental to the success of overseas ventures is having the right financial support and systems in place. A strong banking relationship is key for businesses with any overseas dealing or aspirations. An international bank account, guidance on managing international cashflow, trade services and foreign exchange management (FX) can help businesses keep on top of the demands of international trade. And having a strong banking partner with global reach and experience can be of real benefit. Companies regularly trading overseas should seek guidance on the best solutions for working with
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different currencies. Figures show that only one in 10 businesses trading overseas take advantage of FX options – that’s the ability to agree foreign exchange rates prior to trading to protect transactions against currency fluctuations. There are a range of FX options available to businesses keen not to expose themselves to the volatility of currency rates. Dalip Puri A robust cashflow is another cornerstone of domestic businesses, and is potentially even more important for those trading internationally, where trade cycles can take longer and contracts can be more complex. HSBC recently announced a £1 billion fund for UK SMEs which included financial support through letters of credit and guarantees for overseas trade, to help provide working capital for businesses doing, or planning on doing business internationally during the downturn.
Beyond finance, there are other forms of knowledge and skills that businesses need to negotiate the challenges and unlock potential in overseas commerce. To help businesses address this, UKTI and HSBC have launched a joint partnership to provide training events and trade assistance for businesses wanting to grow their international capability. A series of workshops will take place across the UK for business owners, leaders and finance managers interested in international trade. Ultimately the current economic climate hasn’t dampened the desire for businesses looking to expand overseas. In fact, for many it could be the prime time to seek out potential opportunities in new markets. With detailed research completed, the right advice and the appropriate financial foundations in place, forging trade relationships or expanding operations overseas can give a real impetus to the survival, success and growth of British businesses. Dalip Puri is the Head of Multicultural Commercial Banking at HSBC. For more information please visit www.hsbc.co.uk Asian Voice & Gujarat Samachar - 2009
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