The global economy is a serious opportunity and challenge for high-growth UK businesses. Whether you're already exporting or just considering it, Steve Purdy the MD of Regus identifies four key areas that will help control expansion risks.
Conducting business is becoming increasingly more global as technology, mobility and revenue opportunities in emerging markets are tempting enterprises to expand into new markets in order to reach new customers.
While the world continues to face well-documented economic challenges, from austerity measures in Europe, to the sluggish recovery in the US, and from inflation concerns in Asia to geopolitical instability in the Middle East, going global can deliver a new avenue for prosperity – despite the current climate.
In fact, international trade growth is expected to accelerate from 2014, according to HSBC’s global connections trade forecast. The study asserts businesses with an international presence will recover from the global downturn more rapidly.
In the UK, the government’s business and enterprise minister Michael Fallon recently stated that “targeting new export markets” is one of the top three issues facing the crucial medium-sized business sector.
World trade is predicted to grow by 86 percent in the next 15 years, HSBC forecasters predict as global markets boost their demand for traded goods.
As businesses look to increase profit margins by pursuing new opportunities, reducing the costs associated with doing business globally can be achieved when an organisation takes the time to audit certain processes and considers replacing one approach for a more cost-effective one.
Based on our global experience working with businesses from start-ups to fortune 500s, the cost of doing business internationally can be decreased thanks, in part, to a concerted effort by businesses and governments to develop a more robust and stronger global business community.
The global economy presents immense opportunities for investment and commerce. Evaluating the four key business areas below will present cost-effective options that will help control expansion costs.
1. Market Presence
Once considered a logistical and financial obstacle, having a presence in a new market has never been easier and more cost-effective.
Selecting a new market for a business operation requires balanced consideration of many factors, including personnel, business costs, legal and regulatory concerns. Facility costs represent the second largest cost factor for a business looking to expand. Long term agreements in foreign markets could pose unnecessary financial risks for businesses.
One way businesses are trimming their facilities costs by up to 60 percent is by assuming a more flexible approach to their facility needs. With no upfront capital, a business can establish an immediate presence in any market by setting up a virtual office (VO). While companies want to have a global presence, it’s important they have a local feel. A VO provides companies a local address in prestigious buildings where mail can be sent and a phone number answered in the native language. Office space and meeting rooms can be purchased on an as-needed basis, giving a business that true local feel with minimal overhead.
2. Technology Tears Down Prices and Borders
“New technology underpins regulatory best practice around the world,” said Janamirtra Devan, vice president for financial and private sector development for the world bank group. As emerging markets improve their tec