Expanding overseas can play a critical role in the prosperity of many mid-market companies, so it’s no surprise that 37% of businesses expect to increase exporting in the coming year. And if companies are not considering overseas growth, they can be sure their competitors will be.
Forging new ground
One company that is already looking at exporting well beyond Europe’s shores is Norfolk-based Centurion, which has been making protective head gear, including helmets and face screens, since the nineteenth century. To safeguard its future, CEO Jeff Ward led the business through a total rebranding and restructure when he joined three years ago.
“Centurion is a 140-year-old business and, while our history is something we’re enormously proud of, it was hindering our progress,” says Ward.
“There’s no getting away from the fact that we were stuck in the past. Yes, we’d developed our product range and, yes, we were doing OK, but we weren’t growing and our approach to business was dated. We expected new business to come to us instead of going all out to raise our profile, to network and to make the types of connections that would lead to new contracts.”
Despite being one of the leading players in its sector, Ward says Centurion lacked visibility and definition in the market. “We were too vague about our identity, about what made us stand out from our competitors. Starting from scratch and looking at every aspect of our business helped us focus our attention on who we were and on our goals – the most vital of which was expanding overseas.”
Approaching overseas growth
Ward worked with our advisers on several aspects of Centurion’s restart, including raising its profile locally, optimising its R&D tax relief and, more recently, overseas growth. Over the past year, its international sales have grown by 30% – from £6 million to £9 million – and Ward expects this to continue in 2019, mainly in the Middle East and the US, where the company has a new partnership.
Repositioning itself in both the domestic and international marketplace was key to Centurion’s recent growth. “Exposure, perception and connections are vital when you are trying to expand,” says Ward. “Grant Thornton elevated our profile, initially on a local level by showcasing our company and its success as one of the top 100 businesses in Norfolk, and then by advising on our overseas growth. These are still early days, but I’m happy with the opportunities that are opening up. I’m excited about the partnerships we’ve established and hope that more will follow this year.”
Expanding overseas: The options
But what kind of support might a company need when it’s looking at expanding overseas? Andrew Howie, Head of International and Director of our International Business Centre, explains: “There are so many variables to consider including competition, manufacturing, distribution, employment and tax law. We may do a feasibility study to see if there are genuine opportunities for the business, and will consider whether it’s best to set up a company, an office or just a distribution centre. Tax is also a huge issue: should the company hire locally or take key personnel from the UK, which is something our local experts can help with and advise on?”
However, while many may know they need to engage in more overseas growth, the challenge is getting to grips with their priorities and building a strategy. Growth 365 International is designed for them. “Our starting point with Growth 365 International is to provide focused advice and insights to dynamic clients who have enormous potential for growth,” says Simon Littlewood, head of growth services.
“Clients have a designated specialist adviser – usually a former chief executive – who’ll help them define their ambitions for their business and give them practical advice on how to achieve those ambitions. Our growth experts have often run their own overseas businesses and have fantastic insights to offer.”
Growth 365 International is described as ‘a partner in international trade’. Littlewood continues: “It’s a full support package that adds long-term value and brings many benefits, that may include assistance with recruitment, cash flow and funding, legal and intellectual property advice and marketing localisation and branding. It provides the right support at the right time.”
Turning the tide
There is assistance, too, for businesses that have enjoyed overseas growth, but which now need to focus more on the domestic market. This is the situation that Hertford-based Andusia Recovered Fuels now finds itself in.
Andusia collects combustible material from waste management companies throughout the UK and sells it to combined heat and power plants across Northern Europe and Scandinavia, where it is converted into energy. The company has seen remarkable growth abroad, with international sales growing by 545% between 2014 and 2016, from £2.6 million to £16.9 million. This earned Andusia 10th place in the 2016 Sunday Times SME Export Track 100, which lists Britain’s SMEs with the fastest-growing international sales.
Director Steve Burton says: “Our overseas growth was astonishing but over the past couple of years things have plateaued. The North European market has reached saturation point, partly because those countries are now out of a recession, so are generating their own waste again, and partly because there is increased competition from Dutch and Norwegian companies. One way to grow now is to start operating in the domestic market.”
Exporting and sustainable growth
Plans are very much still on the drawing board, but one possibility is to sell a small share of the company to a private equity firm, which would then enable Andusia to explore opportunities with smaller plants in the UK.
“Our business was 100% exporting but that’s no longer sustainable,” says Burton. “My feeling is that the balance will shift, so that 80% of our business will come from the UK and 20% from exporting, which means quite a change in our operations.”
This, coupled with a Brexit-sized need to de-risk, has led Burton to speak to experts. “We now need quite specific guidance on how to proceed,” he says. “We are relying on our team to put us in touch with people who can help our business move onto the next stage.”
“That’s where our expertise really comes into play,” says Glanville. “Our collaborations extend through every sector and every level right up to government so our clients have immediate introductions to those who are best placed to help their business succeed, both here and abroad.”
Top tips for expanding overseas
Simon Littlewood, Head of growth services
1 Assess the market and your competition to identify genuine opportunities for overseas growth. This may involve conducting a feasibility study to make sure you have the capacity to serve a new market
2 Consider both the practical and administrative implications, including manufacturing and distribution, employment and tax law, consulting with local contacts and external advisers as needed
3 Create a clear vision and set achievable goals for overseas growth that the company can get behind
4 Be intentional about networking and finding the right people. This will help you to better understand local business practices and integrate into new markets
5 Don’t be afraid to adapt your existing approach. While tried and tested methods may feel safe, be careful not to get stuck in old ways of thinking. A reactive and agile approach will help you ensure you are truly meeting the needs of your customers
For more information, please get in touch with Andrew Howie.