By Rhys Handley, Monday 13 November 2017
As time ticks away on the Brexit clock, one of the few things we can be quite certain of is the high degree of uncertainty among businesses about a future outside the EU. Negotiations between Downing Street and Brussels sputter along and, depending on which newspaper you subscribe to, both are to blame for the failure to clarify the situation.
Meanwhile, Philip Hammond is mulling the possibility of a 4% rise in business rates and the Confederation of British Industry (CBI) is beginning to break a sweat at the prospect of having to navigate so much uncharted territory.
There’s also a farrago surrounding the sector impact reports: whether they will ever be published, whether anyone in government has actually read them, or indeed if they have even been completed.
CBI president Paul Drechsler used a speech at the organisation’s annual conference on 6 November to set out many of the fears currently being experienced by SMEs, which he described as the “powerhouses of the UK economy”. He stressed that smaller organisations are “struggling to plan, to predict, to calculate” in the face of so much uncertainty.
And there are plenty in the printing industry expressing these fears, with the BPIF revealing in its latest Printing Outlook survey for Q4 2017 that 50% of UK printers are “somewhat unconfident” about Brexit and a further 5% are “very unconfident” because of the lack of clarity.
None of this paints a promising picture for SMEs looking to take their first steps into the world beyond the UK. But will Brexit necessarily put an end to a company’s international ambitions? Or could UK print even find a stronger foothold in the world outside of Europe?
Been there, done that
International trade is the lifeblood of HH Global – creative production and outsourcing titan. When chief executive Robert MacMillan took over 15 years ago, it was a UK-based operation worth £20m. Today, it has a turnover of around £350m and operates at 43 sites across EMEA, the Americas and Asia Pacific, most recently acquiring Netherlands-based PrintNL Print Management (PPM) earlier this month.
HH has grown rapidly, to the extent that overseas sales now far outstrip domestic business, and MacMillan is in a uniquely confident position where he can reflect on his own experience and dispassionately analyse the state of today’s international markets.
“There will always be plenty of obstacles to international trade,” he says. “Different territories have different tax and employment laws, which can be tricky to grapple with, especially for people who haven’t been exposed to them before.
“Get good advice on your first time around. We were largely following an untrodden path so we made a lot of mistakes for ourselves before getting into this position, but now there are plenty of entities that have branched out – talk to and learn from them.”
At the other end of the spectrum there are print companies in the midst of their first international deals, taking steps into an uncertain world with confidence in their brand’s ability to grow. Belfast-based Northside Graphics – PrintWeek’s 2017 SME of the Year – has plans to reach out to Europe with its digitalprinting.co.uk offering. As a rapidly growing business, managing director Gary White says Northside is in the best possible position to move forward.
“We have long had demand from customers asking us to deliver to mainland Europe,” he says.
“As we have grown and continued to research the possibility, we have finally found that the cost is no longer prohibitive. We will be able to step up our production by up to 30 hours a week and send our products to nine European countries.
“Of course, because no decisions have been announced around Brexit this could be very short-lived for us. Getting a good deal for business could be very positive but if the government comes back with a bad deal – or none at all – it could cause a lot of problems.”
Equally daunting for Northside, along with many other Northern Ireland-based businesses, is the potential of a hard border with the Republic of Ireland interfering with trade. White hopes it won’t come to that but says preparations must be put in place.
Then again there are plenty of businesses that are quite bullish about their prospects post-Brexit. For StackaWraps director Richard Peter, Brexit is neither good nor bad; he anticipates little effect on his company’s ability to license out its patented replica production system.
“We are in a lot of talks right now with potential partners in the US, Australia and New Zealand to license out our patents,” he says.
“Combined with the invaluable resource of the internet, I think our relationship with countries like America will only strengthen.”
Peter’s stance is surprisingly common among printers and a mantra shared among many is perhaps best encapsulated by postal company Whistl’s international director Jonathan Matchett, who says: “International is much bigger than just Europe.”
Another common thread – and perhaps the most heartening takeaway from all this – is that UK print is still held in very high regard by the rest of the world, even with the storm clouds overhead.
And MacMillan adds: “Any print company with the opportunity to go abroad should take the risk, even though it is still a risk.
“UK print is perceived as trustworthy and it is known to be in our nature to go out and expand our horizons. The world knows we are good at doing business, so that’s what we should go out there and do.”
For more on this aspect, see our feature on cashing in on the cachet of ‘brand Britain’.
SMEs are well placed to take on international challenges
Ian Cass, managing director, Forum of Private Business
You can’t avoid change at the moment - it’s everywhere and rapid. Nobody knows if Brexit is going to be a good or a bad thing for British business and that uncertainty has a lot of people worried.
But this is where SMEs have the advantage – we’re small and used to rolling with the punches. There is undoubtedly uncertainty but it’s the bigger entities that are suffering and they are the ones parroting these concerns. Once small businesses have an idea of what we are dealing with, we can be fast on our feet – a lot faster than our bigger counterparts.
Unexpected things are served up to small businesses and we deal with them. There are territories like India and China that are now shifting trade to their parts of the world, if an SME goes into the international market with a positive frame of mind, they will see that great change throws up opportunity.
Key to making this big step for SMEs is education – we need the government to come up with materials aimed at the small businesses telling them where the opportunities are and how they can make the most of them, which means help and support too. You can find some advice by talking to the Department of International Trade but this needs better advertising.
Also important is to make sure there is a strong SME network – talk to businesses who have experience in territories and markets you are considering, find out what the challenges are, as well as making sure you get to know the market from people who have already been there.
The environment for British SMEs right now is reasonably positive, more than you might think. British products and services are well regarded – it is very easy to get conversations started with international partners. It’s worth making the move because other countries are happy to pay a premium for that solid, British reputation.
What does British pr int have to offer the rest of the world?
Andy Cook, managing director, FFEI
“UK print businesses have plenty going for them right now. We have a heritage of being good at interacting with international markets, as well as the prestigious research establishments working on the latest innovations to push all sectors forward. There are challenges out there from a contractual standpoint because it can be hard to commit to a relationship with a foreign client while not knowing how Brexit will turn out, especially when asking three experts will get you five opinions, but we are not in a global recession and Britain is still known for its good work standard.”
Barry Crich, chief operating officer, Adare SEC
“If you are a British business, Brexit is an opportunity to spread your wings outside of Europe. If you look at print, it is a very traditionally rooted business that the UK has invested very well in. We have a significant amount of technical expertise as well as access to all those traditional skills needed to do the work and a strong approach to innovation. With trade growing in developing markets in areas such as Africa, India, and China, where there is an increase in demand for security print jobs, UK print is very well positioned to step confidently into the breach.”
Andy Blundell, chief executive, Communisis
“I am a big fan of international markets. When I worked at De La Rue I dealt with clients in Africa then lived and worked in Singapore. Communisis is positive on international growth because it opens up new opportunities and exposure to economies beyond the UK. I would stress that we are providing services that make supply chains more efficient. My advice on international markets would be to take some brave steps but be sure about underlying demand and seek advice. The government is very helpful in this regard. Positive aspects of British business and culture still resonate worldwide.”