Following an uptick in claims for late and non-payments in the latter half of 2018, next year will be unpredictable for businesses in all industries with external market factors playing more of a role in business failures.
There are many opportunities for small businesses to grow in 2019 and the key is to understand which opportunities to seize and which ones to avoid. Businesses need profitable growth which means understanding the market they’re selling to.
It’s important to avoid undue risk and to not be afraid to say no to opportunities if they’re not quite right. Small businesses should seek out expertise and information to grow in the right direction with minimal risk.
Overseas opportunities are likely to dominate in 2019 with more opportunities for success but, equally, more opportunities for businesses to get burnt. With so much global uncertainty around trade deals, choosing the right opportunity is tricky. It’s important for businesses to have advisors on the ground who understand the local market and can pinpoint why customers want to source from that business.
Before jumping into opportunities, especially with unknown customers in new markets, it’s important to understand what’s driving the opportunity. It could be that the purchaser has had trouble with embargoes or other issues; businesses need to understand the potential pitfalls before going ahead. This is particularly true of one-off sales that are potentially lucrative. If it looks too good to be true, it probably is.
While some businesses have a large appetite for risk, it’s important to set a strategy and stick to it. When opportunities arise that are outside that strategy, they warrant careful investigation and due diligence to avoid unnecessary risk.
Volatility and unpredictability are likely to describe the next 12 months. With such uncertainty, it’s important for businesses to be very careful. Protectionism from trading partners such as the US, plus its trade war with China, can affect Australia. Changes to Asian markets therefore can make Australian businesses vulnerable.
With genuine uncertainty about what the next 12 months holds, businesses are well-advised to protect themselves with trade credit insurance. This can give the confidence to explore new opportunities and find growth without incurring as much risk.
As well as protecting customers against losses from late or non-payments, trade credit insurance providers can provide data-driven insights that help businesses make informed decisions about markets, sectors, and individual customers to pursue. Armed with such information, businesses will be better able to successfully navigate the next 12 months.
Mark Hoppe, Managing Director ANZ, Atradius