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Where SMEs Fail In Importing and Exporting

Research and preparation are important before getting involved with shipments of export cargo and import cargo in international trade.

Where SMEs Fail In Importing and Exporting

Branching out into imports and exports can be extremely lucrative. However, it can also present numerous complications. Without adequate planning, research and preparation, you could end up losing money, breaking the law and in turn potentially even lose your business. To avoid falling victim to the pitfalls of importing and exporting, below you’ll discover the most important things to consider.

You have to spend money to make money. When importing manufactured goods, you’ll often find that suppliers want an upfront payment before they’re willing to ship your items. The customer may not pay until they receive their goods or they may require a certain amount of time to pay it off. Therefore, you’re going to need to have a good amount of short-term funding to bridge the gap between payments.

If you don’t have cash saved up, you’re going to need to have a line of credit open you can use to tide you over when needed.

Restrictions on exporting. One of the most important things you need to do before delving into the world of exports is to research the restrictions which may apply. Different countries have varying restrictions on the goods they will and won’t accept. So, if you’re thinking of exporting to China for example, you’ll need to be aware of the goods that are currently banned from being exported there.

You may also need an exporting license depending upon the type of goods you’re shipping. UK exporters can find out more about whether your business will require a license on the website.

Problems with shipping. Whether you’re importing or exporting, the main problems you’re likely to run into involve shipping. Delays, missing shipments and damaged items are a high risk. Customers these days want a shipping service they can rely on. When they order something, they expect it to arrive quickly and in perfect condition.

Obviously the longer the goods must travel, the more issues that can arise. Some shipping issues are to be expected, but you can limit the likelihood of experiencing frequent problems by choosing a well-known, reliable and respected international courier.

Lack of demand. As mentioned earlier, you’re going to have to research thoroughly before dealing with importing and exporting. Researching the market is particularly important to ensure there’s enough of a demand for the products you’re shipping. A great way to keep track of what’s being favored in the investment markets right now is by keeping up with the Forex market. Services provided by the likes of FxPro, for example, provides up-to-date information on the leading trade markets.

Overall, it’s important to get as much information as possible before deciding whether importing and exporting is right for your business. If you take the time to research everything there is to know, you’ll avoid running into potentially costly problems.

Ben Barlow is a freelance finance writer specializing in stocks and shares, forex and ISAs. After studying business at Lancaster University, Ben worked at a number of financial institutions in London and New York and is now following his passion for writing.

Companies must protect casflow if they are to succeed with more shipments of export cargo and import cargo in international trade.

The G20 and the Need to Reinvigorate International Trade

At present, in the post-Brexit landscape, international trade is both uncertain and struggling. As such, it’s perhaps unsurprising that the subject has been the focus of much of the recent G20 summit.

During the summit, Chinese President Xi Jinping declared the need for G20 nations to avoid protectionism. Instead, Jinping claimed that countries must “enhance mutual understanding” to face a “crucial juncture for the world economy”.

Expanding on these remarks, he told the conference, “The world today is undergoing profound changes never seen before. It’s imperative we blaze a new trail to bring an innovative, invigorated, interconnected and inclusive world economy and a new round of robust growth.”

Xi added that “growth drivers from the previous round of technological progress are gradually fading, while a new round of technological and industrial revolution has yet to gain momentum,” asking the leaders present to become an “action team, instead of a talk shop.”

Xi’s call for globalization is at odds with Britain’s decision to leave the EU. However, most world leaders—crucially including President Obama—are also calling for international collaboration to ease uncertainty on international trade that is currently engulfing markets.

Brexit puts $1.3 trillion worth of global trade at stake, and world leaders are rightly worried about the uncertainty in the future of international trade.

How does this affect your business? It’s reassuring to hear that world leaders are beginning to take steps to navigate the uncertainty surrounding international trade. However, as these things always are at an international political level, any trade deals will take time.

Generally speaking, the largest problem this will cause your business involves cashflow, especially if you cannot make the trades you require. How do you solve this problem?

Sell invoices. You can sell your invoices for cash through companies such as Touch Financial. Here you can get quick cash on the value of the invoices that you’re owed by customers within 24 hours of the invoice being raised. This is all without impacting on your customers and easing any cashflow issues you have.

Downsize and use freelancers. If you’re still struggling, then downsizing may be a better option, especially if you have large sums that need to be paid. If you don’t need a full-time staffer, then don’t employ them. It’s far cheaper to employ a freelancer from somewhere like PeoplePerHour. Then, you only pay them for the exact amount of work they do; making it far cheaper than a full-time salary.

So there we have it. Uncertainty remains in the political system, but cooperation exists at the top level. While politicians are creating a deal, be careful of your cashflow.

Ben Barlow is a freelance finance writer specialising in stocks and shares, forex and ISAs. After studying business at Lancaster University, Ben worked at a number of financial institutions in London and New York and is now following his passion for writing.

Technology has helped streamline the logistics of supply chains of shipments of export cargo and import cargo in international trade.

Modern Technology’s Impact on the Supply Chain

Technology has changed the world that we live in. Its insidious tentacles have pushed their way into every corner of our lives, shaping the way that we eat, shop, date, stay in touch, and even do our banking. We order our takeaways online rather than phoning our local Chinese. We do our weekly shopping through supermarket websites, and buy our clothes from retailers without any brick-and-mortar stores to their name. When we want to start a new relationship, we look for people with similar tastes online. There is no escape from the touch and reach of innovation.

This is not a bad thing. Although many people lament the old days, and the old way of doing things, technology has made our lives more streamlined, more efficient, and more connected. Yes, we might not meet people organically, but we can speak to friends that we haven’t seen in a decade every single day if we choose to, despite the distance that separates us. It has made the impossible possible, and this is something to be celebrated.

The world of commerce has not escaped this influence, and the way that supply chains function has been revolutionized over the last decade. Here, we look at just some of the changes we’re seeing, and how they could benefit your business.

Increased choices of suppliers and buyers. If you’re involved in the commercial sector, then one major change that you’ll have noted over the past decade is your increased access to suppliers, or if you’re a supplier, your increased access to buyers. Thanks to the ever growing utilization of the internet, businesses are far less confined by geographical boundaries. Where once you would have been restricted to buying or selling from those in your local area, you can now shop around, as it were, to find the suppliers offering the lowest prices, or conversely to connect with buyers who will find your competitive charges enticing. This improved ability to join one end of the supply chain with the other has been transformative for the commercial sector, helping to forge hundreds of thousands of new and beneficial professional relationships.

Flexible lending systems. Successful businesses are akin to intricate machines, with capital acting as the oil that keeps all of the cogs turning. The more access a company has to money, the greater its chances of performing well. It’s good, then, that the development of new technology has helped spawn innovative credit lending options. Enterprises like Ebury have taken full advantage of this, taking the place of traditional lenders to improve businesses’ working capital, and fund supplier payments. Such entities have helped to increase the efficiency of the supply chain, creating a brighter future for many SMEs.

Increased choices for transportation and logistics. You cannot have a supply chain without transporting goods between suppliers and buyers, and thanks to the growth of internet usage, and the increasing number of consumers buying online, this is a sector that has burgeoned in recent years. The result is that transportation and logistics have become ever more competitive, helping to bring down delivery costs for businesses and customers alike. Today, a simple Google search will deliver thousands of specialist outfits to choose from, meaning that you can pick only the best and most competitive to act as part of your supply chain. As a result, delivery times have reduced, delivery costs have lessened, and online buying has boomed.

Improved communications. Supply chains that are faster, more efficient, more well-oiled, and more economical, but little of this could have been achieved without the improved communications abilities fostered by our ever-advancing technology. This allows business associates to be in touch with each other every step of the way, from providing immediate confirmation of orders from the supplier’s end, to sending an automatic signed receipt to the supplier once the buyer has received their delivery. Parcels can be tracked, orders amended at the last moment, and money transferred in an instant from one bank account to another, helping to create a system that is all of the above, and highly functional to boot.

When we look back at the world of business even a decade ago, it is almost unrecognizable from where we are now. If technology continues to develop at such a rate, imagine what we might see if we glance back again 10, 20, or even 50 years into the future. Change is happening, and in the commercial sector, it promises to keep on delivering.

Ben Barlow is a freelance finance writer specializing in stocks and shares, forex and ISAs. After studying business at Lancaster University, Ben worked at a number of financial institutions in London and New York and is now following his passion for writing.

Brexit will likely have a negative impact on the UK's shipments of export cargo and import cargo in international trade.

Brexit: Bad News for UK Trade and Economy

While many are still grappling to understand the complexities of Brexit, its clearest message lies in the trail of political devastation that it has left since the EU referendum on June 23. Not only has it abruptly ended the careers and political machinations of remain campaigners such as Prime Minister David Cameron and Chancellor George Osborne, for example, but it has also forced prominent leave voters like Boris Johnson and Nigel Farage to the fringes of Westminster and beyond.

This underlines the difficulty of life after Brexit, with the referendum vote just the start of a long and arduous journey that could bring great austerity to the UK economy. It also suggests that the process of triggering Article 50 and negotiating amiable terms of separation with the EU may be an almost impossible challenge, a view that was reaffirmed when Giuliano Amato (who penned the article and drafted the Lisbon Treaty) claimed this document was never designed to be implemented or acted upon.

How will Trade be Impacted?

Despite this, we have little choice at the moment but to accept that Article 50 will be triggered some time in 2017 and that Britain will deign to leave the EU. In the meantime, we will also see considerable uncertainty grip the British economy, with pivotal export and import sectors likely to huge change and volatility. In fact, it is arguable that the period prior to the UK’s exit will be worse than what eventually follows, as Britain will continue to experience economic instability while also being unable to negotiate new trade deals with non-EU and Commonwealth countries.

But what about the future post-Brexit? Almost uncertainty, the aftermath of Britain leaving the EU would be fraught with disruption and volatility, which would impact on all sectors within the nation’s import and export markets. At present, it is estimated that 35 percent of all UK goods exports make their way to European Union countries, and these would instantly be subjected to inflated tariffs far in excess of the current four percent. This would include automobiles, which are pivotal to the growth of the UK’s economy and labor market.

The increased cost of exporting goods could hit some companies hard, from large-scale car manufacturers to the SMEs that are involved in the distribution of chemicals and commodities. For some the increased tariffs may cause them to downsize their operations, which could in turn impact on employment levels and the amount that is reinvested into the economy on an annual basis. Of course, Britain could offset these losses by aggressively negotiating more lucrative deals with less regulated nations outside of the EU, but this represents a great unknown while such agreements will take time to bloom.

In terms of imports, a similar trend could quickly develop in the wake of Brexit, as the cost of staple commodities such as food and drink rise and gradually inflate the cost of living. At present the UK only produces 60 percent of the food that it’s residents consume nationwide, and as self-sufficiency has fallen so too has the cost of importing. These costs will increase as Britain begins to trade as a non-EU country, while the declining value and power of the pound (which initially plummeted to a 31-year low after the referendum result) could exacerbate the soaring cost of imports.

These cumulative impact of these events may create a cycle of economic decline in the UK, as wages and labor market growth stagnate while the cost of living soars.

How will the Financial Services Sector Fare?

Arguably, the nation’s financial services sector would face an even steeper challenge. After all, the UK moved away from the manufacturing of goods during the premiership of former Conservative leader Margaret Thatcher, who instead prioritized financial services and laid the foundation for London to become the world’s commercial hub for everything from property investment to foreign exchange and financial market trading. Given this and the fact that London contributes an estimated 20 percent to the UK’s GDP, the impact of Brexit on the financial sector could prove significant.

It is also important to recognise that the UK currently runs a major surplus with the EU to the tune of $26.2 billion, which is entirely different in the commodities sector where a trade deficit exists. This instantly alters the level of incentive on the EU’s side, meaning that they will be less inclined to offer the UK favorable exit terms. Not only this, but it is the EU’s policy to ensure that firms in non-European Union countries are offered only limited crossborder access to markets according to strict guidelines, making it extremely difficult to see how the UK can continue to trade freely while also extraditing itself from all political obligations.

If the UK is serious about untangling itself from the EU’s bureaucratic web, it must accept that popular trade models such as European Economic Area membership (boasted by Norway) are entirely out of the question.

With the level of hostility between the EU and the UK reaching fever pitch, political leaders in Brussels may be inclined to create more stringent regulations for access to the single market. This would translate into the creation of significant barriers to entry for the export and import of financial services to and from the UK, which Britain would be unable to oppose after terminating its membership. This could have a devastating impact on fiscal investment into the UK, as nearly 50 percent of this is driven by the financial services sector and many firms may choose to commit their capital elsewhere once Britain’s exit has been confirmed.

The Bottom Line

In truth, nobody knows how the UK economy and its import and export markets will fare in the wake of Brexit. While it is accepted that there will be a sustained period of instability, it is also fair to say that the negotiation of lucrative trade deals outside of the EU could ultimately see the UK grow its GDP and re-establish itself in the world’s top five economies.

These cannot be relied upon, however, while the immediate impact of Brexit would manifest itself through rising export tariffs, increased import costs and the decline of the nation’s vast financial services sector. With the economy already precariously poised in terms of earnings and growth, the short-term damage caused by Brexit could take years to repair.

Ben Barlow is a freelance finance writer specialising in stocks and shares, forex and ISAs. After studying business at Lancaster University, Ben worked at a number of financial institutions in London and New York and is now following his passion for writing.

How should investors change their approaches post-Brexit: this has little to do with shipments of export cargo and import cargo in international trade.

Post-Brexit: How Can Investors Best Plan for Known Unknowns?

On Thursday, June 23, 2016 the United Kingdom voted to leave the European Union. The initial impact of Brexit on world markets was dramatic to say the least; the FTSE fell by eight percent as trading opened the following day, investors quickly bailed out of sterling, and London banking stocks were hit hard, falling as much as 21 percent. The repercussions of Brexit were felt throughout world markets.

So one month on, how are the markets performing and how can investors best plan for “known unknowns”?

Benjamin Franklin once said “out of adversity comes opportunity.” Many investors used the post Brexit market conditions as an opportunity to go bargain hunting and the result was that many markets recovered quickly. “FTSE 100 regains all its losses since shock Brexit vote” read a Guardian headline just a week after the referendum and currently the USA S&P 500 is experiencing record highs. Sterling is still weak, however, and there is still uncertainty in the air because no one really knows how the UK will look moving forward. It could take two years or more until the UK’s new relationship with the EU is clear and while this is the case, there will be opportunities for investors to capitalise on.

The post-Brexit environment has not only led to changes in the way investors look at the markets, but also to the ways that financial companies are shaping the products they offer to their customers. This signifies, perhaps, a wider trend in investment strategies and while it is still a good idea for investors to look to diversify their portfolios with options such as stocks and shares or using a platform such as IG Investments, it may well be that they need to freshen their approach to the way they look at each component within it and new opportunities.

For example, foreign exchange investors may be looking for sterling to hit what they consider to be a “natural floor” and at that juncture invest long in sterling in anticipation of a recovery. This data led approach could be just the strategy required to help investors wade through the waves of market speculation being reported in the media. Financial data could be key to medium term investment success and keeping a close eye on factors such as inflation and foreign investment may yield dividends. Alongside this, investors need to hone their skills when it comes to technical chart analysis, options traders, for example, will need to pinpoint new resistance levels on instruments such as the DAX, where post Brexit market adjustments are still burgeoning.

In the short term investors can best plan for known unknowns by re-evaluating their investment and risk strategy. Attempting to work out what is unknown would, in all probability, not be a productive use of investors time and energy, whereas analysing fresh data as it is available and applying that data to see the affect it has on various markets could prove to be the best way ahead and the key to unlocking new opportunities arising in the wake of Brexit.

Ben Barlow is a freelance finance writer specialising in stocks and shares, forex and ISAs. After studying business at Lancaster University, Ben worked at a number of financial institutions in London and New York and is now following his passion for writing.