How do we persuade more British businesses to tap into potentially lucrative export markets overseas?
The official government target is for Britain’s exports to double to £1 trillion a year by 2020 – but that currently looks to be a very ambitious objective.
In fact, research published in July by the Institute of Chartered Accountants in England and Wales (ICAEW) suggests the proportion of British businesses selling products and services overseas has remained more or less constant over the past four years, at around 50 per cent. Moreover, of those businesses not currently exporting, just 2 per cent said they intended to begin doing so over the next 12 months.
Policymakers, then, have their work cut out for them. In the end, however, there is only so much that government can do to boost exports. Official support is certainly important, but would-be exporters need other types of assistance too.
Investors in growing businesses must play an important role in providing that assistance. These companies very often lack the financial firepower required to take advantage of opportunities overseas. And even when businesses do have the resources necessary to begin exporting – or to expand their exporting activities – their access to specialist advice and expertise can make the difference between success and failure.
It would be a mistake to think that British companies lack the ambition to pursue growth through an international strategy. Where businesses have received support, they have often gone on to exploit opportunities very successfully.
We have seen that first-hand at Panoramic Growth Equity where our investment and support has often proved to be the catalyst required for companies to expand overseas on several occasions.
A good example is Dog Digital, an award-winning communications agency that has been growing at 20 per cent a year in recent times. The business was actively considering its options overseas, but it was the £1 million investment made by Panoramic in the firm in 2012 that enabled it to take the plunge, with the opening of a new office in Singapore.
That has proved to be a big success. Since Dog Digital set up its Singapore operation, it has been able to attract a diverse range of clients including BlackMask Rum, JP Morgan, World Wildlife Fund and Johnson & Johnson. Moreover, existing clients have been keen to use the agency’s additional international capacity, with customers such as Aberdeen Asset Management working with Dog in both Europe and Asia.
Dog Digital has also realised it needs other types of support to really maximise the potential of its new venture. For example, it has highlighted staff development as a particular priority, and Panoramic has helped the business to launch a new international intern programme so that staff have the option of moving between its global offices.
There is no shortage of similar success stories, proving that where British firms are able to access international markets – with the right support in place – the opportunities are exciting.
Examples include Solfex Energy Systems, where a Panoramic investment enabled the company to broaden its product sourcing into the Far East, and Edesix, the body-worn video recording solutions business, which is now targeting new customers in the Middle and Far East, following another Panoramic investment earlier this year.
At Andante Travels, our investment has been critical in helping the business to really step up marketing of its archaeological trips in the US market, while an investment in digital marketing business Captify has seen it boost its development team offshore and look to broaden its European reach with the opening of a German office in August 2013.
Get it right and the effect can be transformational. At Panoramic-backed Cascade, a manufacturer of advanced scientific instruments, exports now account for 85 per cent of revenues, with its major markets including Germany, Japan, USA and South America. At Edesix, overseas sales have also grown quickly and the business is now seeking local partners in order to find cost-effective entry points into new markets.
The bottom line is that British companies can rise to meet the government’s challenge – but they will need more than just encouragement to capitalise on overseas opportunities. Financial support and practical assistance from investors with experience of export markets will be crucial.
