The task many businesses faced over the last 18 months was simply surviving. But now that lockdowns have been lifted, consumer spending is on the rise, and borders have reopened, many SMEs are entering a growth phase and looking at export markets with renewed enthusiasm.
Exporting is a big step for any SME: it takes time, resources, and management commitment. So, is 2022 the year for your business to establish a presence offshore?
Tim Beresford, Deputy CEO, Austrade
“With the challenges of 2021 behind us, we enter 2022 filled with optimism and increased drive to help Australian exporters succeed globally as countries begin to reopen.
“The raft of government policies and programs Austrade helped administer to support exporters, the tourism and education sectors during the COVID-19 pandemic, underpins this optimism.
“For instance, the International Freight Assistance Mechanism (IFAM) helped restore access to critical global supply chains for exporters during the pandemic. The program has facilitated the delivery of Australian products to 58 destinations on more than 13,000 flights since IFAM commenced on 1 April 2020. As a result, IFAM has supported 35,000 direct jobs and a further 120,000 indirect jobs reliant on air freight.
“Similarly, the Agribusiness Expansion Initiative (ABEI) which commenced on 23 December 2020, implemented in response to COVID-19, has helped exporters to grow their footprint in existing markets and diversify into new ones.
“Tourism operators and the sector alike have also been aided by targeted programs to ensure they remain viable and the recent THRIVE 2030 program will build on rejuvenating Australia’s visitor economy.
“Topping this off is the new Australia-UK Free Trade Agreement – signed on 17 December 2021 and enters into force in the second half of this year – which will strengthen diversification and COVID-19 recovery for both countries.
“The Australia-UK FTA is about creating new export opportunities and jobs for business by eliminating tariffs on over 99 per cent of Australian goods exports to the UK.
“This agreement along with existing FTAs, the return of business missions and the ability to attend international trade conferences will only enhance opportunities for Australian exporters to expand their global footprints.”
David McCredie OBE, CEO, The Australian British Chamber of Commerce
“Christmas has come early for Australian exporters this year.
“With an ambitious and comprehensive Free Trade Agreement signed by Australia and the United Kingdom just last Friday, I can confidently say there will be no better time to start exporting than in 2022.
“Amongst a multitude of two-way trade benefits, this historic FTA will provide businesses across our nation with a competitive edge, with the elimination of tariffs and improved market access for goods and services exports and investment in both directions.
“This is a truly exciting time for both countries, and The Australian British Chamber of Commerce welcomes this agreement as a major advantage for our Members.
Promoting, fostering and furthering trade and investment ties between the AU and UK is at the heart of what we do, so helping our Members take advantage of this significant moment in our bilateral relationship will be the focus for 2022.”
Jason Toshack, Vice President and GM ANZ, Oracle NetSuite
“With border restrictions easing and consumer confidence on the rise, Australian business leaders have some important decisions to make in 2022. Many may have their sights set on international expansion. While opening an export market can be a boost to any business, managing operations across multiple locations can quickly become challenging if not managed properly.
“It’s important to do the groundwork before jumping in. Leaders should continuously review potential markets to make sure they are making the right decisions. Gathering the necessary analysis and insights are key when assessing which investment will return the best benefit, while making sure to minimise risk and preserve cash flow. If you plan to export products or goods, it is crucial to expertly manage your supply chain to ensure business continuity, all while dealing with different currencies and regulatory frameworks.
Business leaders should have strong processes in place to manage this heightened complexity efficiently, and these processes should be underpinned by a business management system that can seamlessly integrate data across financials, supply chain and inventory all in one place. Having a robust system in place, will give you the best chance to successfully execute on your vision and reap the benefits of going global.”
Steven Dooley, Currency Strategist, Western Union Business Solutions
“There are significant opportunities for businesses to start exporting in 2022, however, history has shown that periods of economic recovery often trigger volatile and abrupt shifts in currency rates.
“Research from Western Union Business Solutions found that FX was the biggest pain point for 66% of finance leaders in the past year.
“Influenced by multiple factors from global growth, commodity prices, vaccination rates, political landscape and central bank activity, there will be unpredictability across the FX forecast, but one of the greatest risks is complacency.
“While there is no one-size-fits-all approach to FX risk management, it is important to:
Identify currency exposures
- Get full visibility
- Accurately forecast foreign cash flow
- Calculate risk
Develop a currency risk management strategy
- Reduce unexpected financial losses
- Improve cash flow predictions
- Build a competitive advantage
Develop a robust hedging strategy
- Set a minimum threshold
- Use insights to benchmark your strategy
Regularly review performance”
Joe Donnachie, supply chain finance manager, Octet
“In the face of ongoing supply chain challenges such as the unpredictability of increased freight costs, shipping delays and foreign exchange fluctuations, a strong cashflow position will be key to a resilient export business in 2022. A secure financing platform can help to create trust in a border restricted trade environment that prohibits meeting suppliers (both in Australia & overseas) or vetting facilities in person.
“Octet’s unsecured trade finance solution empowers growing businesses which, when utilised with suppliers, can increase purchasing power, strengthen supply chains, and help to gain a competitive edge via quicker payment.
“Meanwhile, flexible finance options like debtor finance can help a business tap into the power of their receivables, providing instant access to cash tied up in unpaid invoices in order to fund sustainable growth.”