Succeeding in the UK
Do it right in the UK - or don't do it at all
Thursday, January 21 2010 || Comment || BY Eric Tracey
I’m not talking about having your top execs fly in, shake hands and jet off again. If you’re serious about setting up in the UK, you need to have a board member, founder or senior manager based over here, fronting the initial establishment phase. It makes a huge difference if a company has someone on the ground here who utterly gets their business drivers, strategy and objectives.
Online accounting software company Xero has done this very successfully. One of its founders, Hamish Edwards, has just returned to New Zealand after spending two years as the company’s UK chief executive. As a senior company member he’s been able to make the judgement calls necessary to set up business here. And he’s had an open hotline back to Rod Drury in New Zealand.
Merino Kids, Trilogy, and Bloomsbury & Co got it right as well. They have all put senior people in-market and they are now perceived to be well-integrated, European-style companies. Having an owner or board member in-market generates confidence. You gain the credentials of being a local company. People here take you much more seriously as a company.
On the other hand, I’ve seen some companies that have demonstrably not been prepared to invest enough. With the exchange rate where it has been over the past year, maybe Kiwi companies think they need an awful lot of New Zealand dollars to invest in the UK.
I’ve seen two New Zealand companies that haven’t been prepared to stay long enough. They decided their UK operations had to become cashflow positive within six months, but the lead time to getting established in their line of business is probably closer to 18 months.
If that’s the case, why bother? If companies aren’t prepared to invest sufficient time and resources into the UK then don’t do it at all.
Xero’s Hamish Edwards is a very experienced businessman. Because of his groundwork here, Xero has now been able to employ a high-calibre successor to manage the UK business. There’s no way the company could have recruited him even nine months ago.
To me, that’s a really good measure of how to get it right. And it’s a good indication of why you need a senior-ranking business person to front your business at first in this market. That person must build sufficient business momentum before handing the company over to the next in-market leader. Companies that fail to learn this lesson run the risk of tracking backwards when the founder or director returns home.
Be realistic about the resources you can put into the UK — or any market for that matter. Make sure you align your goals and objectives, and your strategies for achieving those objectives with the resources you’ve got. For most companies this probably means modifying and reducing — and then reducing again — your focus. That way, you can train your resources on the single most important area.
Having the right strategies in place to invest in the long haul applies as much to large companies as to smaller ones. Overseas advisory boards set up through New Zealand Trade & Enterprise’s Beachheads programme help a variety of companies with their market entry and growth.
While many of those that have participated so far in the Europe Beachheads programme would be considered small to medium-sized businesses, there is no reason why the model can’t help larger companies too. Indeed, in markets the size of the UK, France or Germany, even reasonably large New Zealand companies are relatively small.
I think it is a smart idea for businesses of all sizes to make use of the New Zealand diaspora. I’m convinced that the network of contacts we have already developed can help larger organisations just as easily as it helps smaller companies. In fact, bigger companies have the scale and capability to more quickly make the most of our networks and reap the benefits. And when they are successful, New Zealand gains the advantage of a new set of mentors for other companies seeking to enter these markets.
Eric Tracey is chair of the Europe Beachheads Advisory Board. He is an adviser to or a director of a number of UK companies, including Chloride Group, a listed company specialising in power protection, and the NEC Group.
It is well known that money makes us free. But what to do when someone doesn't have cash? The one way only is to try to get the home loans or small business loan.
Posted by Maynard26LUCILE at 15:28 on August 3, 2011
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