By: Jed Rose, GM EMEA at Airwallex
After the events of the last eighteen months, it could be understandable if UK SMEs decided that 2022 is the year for consolidation.
Despite widespread supply chain disruption and changing regulations due to Brexit, they’re upbeat about international expansion. Indeed, our own research revealed that 77% of UK SMEs plan to expand the business into – or further into – foreign markets next year.
This optimism is extremely encouraging. To harness it, companies need to be aware of a variety of factors. These range from the functional in terms of digital transformation, to the practical such as an improved knowledge of their new local markets.
Here are five suggestions as to how SMEs can meaningfully accelerate their growth plans in 2022.
Put simply, digitalisation improves business efficiency, agility and flexibility, and allows the organisation to react swiftly to market disruption and customer demand, however, t implementing a digital-first mindset must also be applied to the management of the business, especially in terms of cash flow.
Importantly, it doesn’t require wholesale change. Digital models can sit alongside traditional banks, and businesses need to think about how to make the most of both propositions. Such integration is critical for businesses seeking a competitive edge: our research found that 66% of UK SMEs believe businesses which don’t adapt their banking strategies for the digital age will struggle against the competition.
Watch out for hidden costs
Before entering any market it’s absolutely critical to research the local payments landscape. Regulations and compliance demands differ from country-to-country and what works in one market might not achieve the regulatory threshold elsewhere. This can bring fines and reputational damage – the latter being a major blow when trying to increase brand awareness as well as building a partnership network.
Research will also identify where hidden charges might lie – wholly avoidable costs which would otherwise eat into the bottom line and profit margins. Working with payment partners who are transparent about fees and any FX costs will help you avoid surprise hits to your bottom-line.
Put the customer first
A business lives and dies on the strength of its customer service. Researching local nuance and market specifics will help prepare your business ahead of operating in a new market.
Differentiating your offering through partnering with the right companies who have appropriately adaptable technologies reflects in your own ability to support the customer. For example, when it comes to pricing, having embedded FX locked in will ensure buyers pay exactly what they expect – helping to reduce payment costs, improve the value for money spent, or assist with coordination of pricing with marketing campaigns. If the customer gets what they expect, then it follows that they don’t have to contact customer support – freeing up teams to work on other, more constructive parts of the business.
Create a great company culture
Prioritise the welfare of staff and make sure they feel appreciated and understood. Inspiration drives productivity, so lead by example and ensure that people across all levels of management do the same.
Employee satisfaction is directly linked to customer satisfaction – if your teams that interact with customers are not bought into what you do, then your customers will not likely be bought in as well. Employee satisfaction is also directly linked to employee growth and retention – both of which have a direct impact on company finances and operational efficiency.
Ensure you have maximum visibility of your finances
Expansion brings in more partners, suppliers, and – hopefully – customers. And it probably does so with new currencies and fees, all alongside the introduction of more complex cash flow. Not being able to see all of these from a single vantage point risks introducing points of weakness and unexpected surprises.
Having an overview of finances will enable businesses to make informed and effective decisions. Our research also found that 64% of SMEs surveyed feel that businesses without a real-time view of expenses, transfers and all other transactions are not firmly in control of their finances. It’s a worrying thought and an avoidable scenario, so put visibility at the top of the agenda for your finances.
Preparing for success
International expansion clearly requires businesses to consider multiple factors as there are many complexities with successfully going into a new market –
Creating the right company culture and prioritising customer service is key, as is ensuring partners and suppliers match your values and ethos.
In addition, with changing regulations, being armed with the knowledge of the payment landscape has become an even bigger imperative for many businesses. Implementing the right processes and infrastructure to provide such transparency, while increasing control and management of cash flow, must be seen as a foundation to short- and long-term success.