Birmingham - Safer trading with Coface #1
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Birmingham is one of the most economically dynamic and enterprising cities in the country, but how can SMEs take advantage of the exciting opportunities for growth while avoiding the pitfalls? In this series, credit insurance specialists Coface, provide expert risk management advice based on their years of experience in assessing and insuring trade risk. In recent years, Birmingham has become a magnet for young talent, drawn by the exciting job opportunities, vibrant cultural scene, competitive property prices and improving transport links. The regeneration of the UK’s second city into an engine for economic growth in the West Midlands has been spectacular. For example, in 2014, Birmingham was identified as one of the UK’s high growth, dynamic economies by accountancy firm, Grant Thornton because of its enterprise culture, population growth and strong infrastructure 1 . This may explain why the area attracted more overseas investment projects than any other during the previous 12 months, according to UKTI. This may explain why the area attracted more overseas investment projects than any other during the previous 12 months, according to UKTI. More recently, West Midlands’ exporters have blazed a trail for the rest of England by developing trading links with China and the USA, as well as the Eurozone countries of Germany, France and the Netherlands. According to the latest Regional Trade Statistics 2 the region exported goods worth £28.4 billion in the year ending September 2014, the largest percentage increase for the English regions (11.2 per cent) in the context of an overall fall in UK exports. Partly thanks to its strength in the automotive sector, the West Midlands is now the third largest exporting region in England after the South East and London. It is also a centre for job creation: the latest labour statistics 3 show the West Midlands experienced the largest increase in the employment rate in October to December 2014 compared with the previous Quarter. Intelligent trading The regeneration of Birmingham is all the more exciting because wealth creation is not just being driven by the influx of foreign investment and arrival of global names such as Deutsche Bank but by local start-ups and thriving SMEs, especially in the vibrant technology sector. If your business belongs in this category, the challenge is to exploit growth opportunities and expand your customer base without taking excessive risks. Sadly, many smaller companies are reluctant to explore emerging markets for fear of losing their investment, while at the other extreme, a few gamble on the trustworthiness of new trading partners, only to be let down and cripple their cashflow with bad debt. The good news is that it is possible to trade safely and successfully by implementing sound credit management practices, starting with thorough research. Here are Coface’s top five tips: Of course, credit risk assessment is much quicker and easier if you work in partnership with an established specialist in the field. For example Coface holds information on about 65 million companies worldwide and makes up to 10,000 underwriting decisions every day. This expertise helps Coface’s SME clients to assess the trading behaviour, financial health and credit worthiness of potential and existing customers before extending credit. This is all for a fixed annual price which includes credit insurance and payment collection. For more information about Coface’s products for SMEs, Premier Trader and SafeTrader, call 01923 478111 or visit www.cofaceuk.com References 1 Where Growth Happens, Grant Thornton, 2014 2 Regional Trade Statistics Third Quarter 2014, HMRC, 04 December 2014 3 Regional Labour Market, February 2015, ONS, 18 February 2015 Next time Obtaining credit insurance to protect your balance sheet Safer trading with Coface 1. Don’t be convinced by a company’s website or its entry in a directory. Unscrupulous traders can ‘buy’ visibility so obtain a full name, business address and, if possible, home address for the company director. 2. Encourage companies to be open about their financial information. If they are reputable, this is in their interests as much as yours. 3. Don’t rely on your instinct about the trustworthiness of a new customer. Base decisions on hard evidence rather than any personal rapport with a company director. 4. Check the information is the most up-to-date available – an old financial report is no guide to the current credit worthiness of customers. 5. Don’t be discouraged if the company uses a factor or invoice discounter. This is a growing means of obtaining finance.
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Birmingham is one of the most economically dynamic and enterprising cities in the country, but how can SMEs take advantage of the exciting opportunities for growth while avoiding the pitfalls? In this series, credit insurance specialists Coface, provide expert risk management advice based on their years of experience in assessing and insuring trade risk.
Transcript of Birmingham - Safer trading with Coface #1
Birmingham is one of the most economically dynamic andenterprising cities in the country, but how can SMEs takeadvantage of the exciting opportunities for growth whileavoiding the pitfalls? In this series, credit insurancespecialists Coface, provide expert risk management advicebased on their years of experience in assessing andinsuring trade risk.
In recent years, Birmingham has become a magnet for youngtalent, drawn by the exciting job opportunities, vibrant culturalscene, competitive property prices and improving transportlinks. The regeneration of the UK’s second city into an engine foreconomic growth in the West Midlands has been spectacular.
For example, in 2014, Birmingham was identified as one of theUK’s high growth, dynamic economies by accountancy firm,Grant Thornton because of its enterprise culture, populationgrowth and strong infrastructure1. This may explain why thearea attracted more overseas investment projects than anyother during the previous 12 months, according to UKTI. Thismay explain why the area attracted more overseas investmentprojects than any other during the previous 12 months,according to UKTI.
More recently, West Midlands’ exporters have blazed a trail forthe rest of England by developing trading links with China andthe USA, as well as the Eurozone countries of Germany, Franceand the Netherlands. According to the latest Regional TradeStatistics2 the region exported goods worth £28.4 billion in theyear ending September 2014, the largest percentage increasefor the English regions (11.2 per cent) in the context of anoverall fall in UK exports. Partly thanks to its strength in theautomotive sector, the West Midlands is now the third largestexporting region in England after the South East and London. Itis also a centre for job creation: the latest labour statistics3
show the West Midlands experienced the largest increase in theemployment rate in October to December 2014 compared withthe previous Quarter.
Intelligent trading
The regeneration of Birmingham is all the more excitingbecause wealth creation is not just being driven by the influx offoreign investment and arrival of global names such asDeutsche Bank but by local start-ups and thriving SMEs,especially in the vibrant technology sector.
If your business belongs in this category, the challenge is toexploit growth opportunities and expand your customer basewithout taking excessive risks. Sadly, many smaller companiesare reluctant to explore emerging markets for fear of losing theirinvestment, while at the other extreme, a few gamble on thetrustworthiness of new trading partners, only to be let downand cripple their cashflow with bad debt.
The good news is that it is possible to trade safely andsuccessfully by implementing sound credit managementpractices, starting with thorough research.
Here are Coface’s top five tips:
Of course, credit risk assessment is much quicker and easier ifyou work in partnership with an established specialist in thefield. For example Coface holds information on about 65 millioncompanies worldwide and makes up to 10,000 underwritingdecisions every day.
This expertise helps Coface’s SME clients to assess the tradingbehaviour, financial health and credit worthiness of potentialand existing customers before extending credit. This is all for afixed annual price which includes credit insurance and paymentcollection.
For more information about Coface’s products forSMEs, Premier Trader and SafeTrader,
call 01923 478111 or visit www.cofaceuk.com
References1 Where Growth Happens, Grant Thornton, 2014
2 Regional Trade Statistics Third Quarter 2014, HMRC, 04 December 2014
3 Regional Labour Market, February 2015, ONS, 18 February 2015
Next timeObtaining credit insurance to protect your balance sheet
Safer trading with Coface
1. Don’t be convinced by a company’s website orits entry in a directory. Unscrupulous traders can‘buy’ visibility so obtain a full name, businessaddress and, if possible, home address for thecompany director.
2. Encourage companies to be open about theirfinancial information. If they are reputable, this isin their interests as much as yours.
3. Don’t rely on your instinct about thetrustworthiness of a new customer. Base decisionson hard evidence rather than any personal rapportwith a company director.
4. Check the information is the most up-to-dateavailable – an old financial report is no guide tothe current credit worthiness of customers.
5. Don’t be discouraged if the company uses afactor or invoice discounter. This is a growingmeans of obtaining finance.
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