Diversification beyond Ireland can help firms manage risk

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Diversification beyond Ireland can help firms manage risk


'The economic case for increasing the number of Irish exporters, and for increasing activity levels of those already exporting, is clear'. Stock image
‘The economic case for increasing the number of Irish exporters, and for increasing activity levels of those already exporting, is clear’. Stock image

Indigenous exporters play a vital role in the Irish economy. By successfully growing sales in overseas markets, they create and sustain the kinds of jobs that support regionally balanced economic growth.

What is good for the economy is good for individual firms. The benefits of exporting often include increased sales and profitability, faster growth, greater economies of scale, opportunities to extend a product or service life cycle, and improved innovation and competitiveness. Successful exporting creates a virtuous circle and brings enhanced credibility, which facilitates new business development.

Crucially, diversification beyond the domestic market also allows companies to better manage risk. The more markets you are active in, the less susceptible you are to economic cycles in any one of them.

The economic case for increasing the number of Irish exporters, and for increasing activity levels of those already exporting, is clear.

Set against it, however, are factors that can hold first-time exporters back, like the comfort of the status quo and fear of the unfamiliar. For SMEs focused on the domestic market, developing export sales can seem daunting. Yet there are opportunities in the UK, eurozone, US, and beyond that should be explored. Put simply, where do you start?

At Enterprise Ireland, Brexit makes helping companies to achieve their global ambition more important than ever. We have developed a tool for potential and emerging exporters to support that objective. The ‘Prepare to Export Scorecard’ is an interactive online facility that can be used to see how ready firms are to start exporting. The easy-to-use, self-assessment tool, analyses answers to a range of questions and generates an immediate report.

The on-the-spot assessment focuses on your level of export-readiness across six key business pillars: business planning, people management, operations, sales and marketing, innovation, and finance.

The scorecard enables potential exporters to focus on key aspects of their business, helping them to consider, not just the question of where to start, but to define what practical steps can be taken to get there.

There is also a peer learning element to the scorecard. Viewers can access online video case studies, in which fellow SME teams share export experiences, frankly describing challenges they faced and how they overcame them.

The exporting journey is worth taking. You only have to consider the export results for Irish SMEs recently published by Enterprise Ireland to see why. Last month, we announced that companies we support had recorded export sales of €22.71bn in 2017, representing a 7pc increase on 2016.

In all, Enterprise Ireland-backed companies achieved total sales of €44.4bn, up 8pc on 2016. Some 20pc of the exports of those companies were to the eurozone, which saw growth of 9pc to €4.61bn in 2017.

Exports to the UK, the largest market for Irish exports now, and most likely in the future, and which represents 34pc of exports, delivered growth of 4pc to €7.62bn.

While it has been a good year for the exports of Irish SMEs, continuing to support new and existing exporters to expand their reach remains a major priority.

A survey we conducted also found that 85pc of companies we support are actively preparing for Brexit.

That is reassuring – ambitious companies strategise and plan, knowing preparedness is key to handling both the opportunities and challenges that lie ahead. That is one reason why our Prepare to Export Scorecard makes a useful starting point for SMEs looking to assess export preparedness.

Success in global markets is good for companies, good for the economy, and good for jobs. Our scorecard is a tool which will help firms consider how best to achieve their global ambition.

To learn more about the Prepare to Export Scorecard, visit: enterprise-ireland.com/ExporterDevelopment

Garrett Murray is head of exporter development at Enterprise Ireland

Sunday Indo Business

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