Challenges

There are a number of challenges UK companies face when looking to trade beyond our borders. We’ve listed a few below:

RESOURCE: Setting up an export operation is human capital heavy; pressures on capacity, production, and skill sets can be significant;
MARKET DATA: Researching foreign markets is undoubtedly more challenging and resource intensive for a company than researching its own domestic market, particularly if it is looking to export to less developed countries where some data simply isn’t available;
CULTURE: Understanding different cultures, ethical standards, negotiation styles, and ways of conducting business can seem very daunting to potential exporters;
FINANCE: Trading internationally can involve upfront investment that can impact on a business’ cash flow. Furthermore, as it takes time to develop new markets, the return on this investment is not likely to be immediate;
RISK: Many companies are put off by the risk of exchange rate fluctuations and non-payment for goods and services by foreign buyers;
RED TAPE: Some companies will require Export Licenses and specific documentation to sell their goods abroad; this can appear excessive and daunting;
INTELLECTUAL PROPERTY: Protecting intellectual property abroad can be complicated and involved;
LEGAL SYSTEMS: Understanding the different legal requirements and compliance issues in foreign markets can seem daunting, i.e. employment practices, taxation, currency dealings, packaging and label requirements, and so on;
PAYMENT TERMS AND SYSTEMS: Trading internationally will likely require a company to change the payment terms they offer and the systems they use to receive payment;
CREDIT RISK: Companies are often dissuaded by a fear that they will be unable to accurately assess the creditworthiness of international customers;
POLITICAL LANDSCAPE: The political landscape of the foreign market a company is looking to trade with can impact its business plans i.e. political instability can impact a government’s ability to enforce law and implement policy.