The Export Paradox

For UK businesses looking beyond domestic borders, the promise of international growth is compelling – but so are the risks. While global expansion is often framed as a natural next step for ambitious companies, the reality is far more complex. From navigating unfamiliar markets to managing financial exposure, the path outward is rarely straightforward. Yet, as John Carroll, CEO of Navigator Global, a digital platform designed as a single, structured gateway for businesses to access end-to-end trade support by Santander, makes clear, the rewards can outweigh the challenges – if businesses are prepared. “Companies that trade internationally tend to be more optimistic and perform better,” he says. “That’s been consistent over several years of data.” Carroll is referring to Santander’s long-running Trade Barometer, which tracks the outlook of nearly 1,000 UK businesses with international ambitions. Around 70% are already trading overseas, with a further 12% planning to do so within the next year. What stands out is not just participation, but mindset: those engaging internationally are consistently more growth-focused. In a low-growth domestic environment – where UK growth hovers around 1% – that outward focus is becoming less optional and more essential.

The five barriers businesses face
Despite the optimism, the obstacles to international expansion remain persistent. According to Carroll, they tend to fall into five core areas. The first is market access: understanding who will buy a product overseas and how to reach them. “It’s relatively easy to identify customers if you’re selling in Manchester from Leeds,” he says. “It’s a very different challenge when you’re looking at Tokyo or Mumbai.” Second comes regulation. Each market brings its own compliance requirements, often with significant variation. A food product that meets UK standards may require entirely different certifications in Japan or the Middle East. Third is logistics – particularly for companies dealing in physical goods. Global supply chains introduce new vulnerabilities, from disrupted shipping routes to geopolitical tensions affecting key trade corridors. The fourth challenge is payment. Without established trust between buyer and seller, securing reliable payment mechanisms becomes more complex – a point Mark Ling, Head of Trade at Santander UK, sees frequently. Finally, there is the question of presence. Many contracts, particularly in large-scale projects, require some form of local footprint. For smaller businesses, establishing that presence cost-effectively can be a major hurdle. “These challenges are consistent,” Ling notes. “They may shift in order slightly, but they’re always there.”

Why exporters outperform
If the barriers are well known, so too are the advantages. Exporting businesses are not only more optimistic – they are often more innovative.“There’s strong empirical evidence that companies trading internationally tend to be more innovative,” says Ling. “It’s a key trait of businesses that scale.” Carroll frames it more simply. Competing globally forces improvement. “If you’re running 100 metres in a local race, you can perform at one level,” he says. “But if you’re competing globally, you have to raise your game. That’s what drives innovation.” There is also a resilience factor. Businesses operating across multiple markets are less exposed to downturns in any single economy. Diversification, in this sense, becomes a form of risk management. But that resilience comes at a cost: complexity.

The financing gap
One of the most common mistakes businesses make is leaving financial planning too late. “Companies often secure a contract and then come to the bank asking how to fund it,” Ling explains. “At that point, it can already be too late.” International trade introduces layers of financial risk that don’t exist domestically. Banks must assess not only the exporting company, but also the overseas buyer, the terms of trade, and the broader country risk. “There are multiple mechanisms in trade finance,” Ling says. “Each comes with a different balance of risk between importer and exporter. Understanding that risk – and mitigating it – takes time.” This is where early engagement becomes critical. Businesses that involve financial partners at the planning stage are far better positioned to structure deals that are both viable and sustainable.

What signals readiness to expand?
In uncertain economic conditions, many businesses hesitate to expand internationally. But there are clear indicators that a company may be ready. The first is saturation in the domestic market. “If growth opportunities at home are limited, businesses start looking outward,” Ling says. The second is external demand. In an increasingly connected world, overseas interest can emerge quickly. A strong product or service may attract international attention before a company has actively pursued it. The third factor is structural change –  most notably Brexit. For many UK firms, increased friction in European trade has prompted a reassessment of global opportunities. “Companies are starting to look beyond traditional markets,” Ling notes. “That shift is significant.” While opportunity is abundant, execution remains the differentiator. Banks, Carroll emphasises, are fundamentally assessing credibility. “If your business plan is solid, the bank is more likely to back you,” he says. That plan must account not only for opportunity, but for the realities of operating in unfamiliar markets. Regulatory compliance, logistics, cultural differences and financial exposure all need to be understood in advance. “There’s greater upside in international trade,” Carroll says. “But there’s also a greater challenge.” When things go wrong, the causes tend to fall into two broad categories. The first is excessive caution. Some businesses are deterred by perceived complexity and never take the first step. The second is overconfidence. “Assuming international trade is the same as domestic trade is a mistake,” Carroll says. Ling points to well-known examples like Marks & Spencer. “When they first took their designs into Asia, they didn’t work. People are a different size in Asia, so there’s a fundamental mismatch.” Retailers that failed to adapt products to local markets have struggled, while others that invested in research and localisation have succeeded.  “And then you’ll see somebody else that’s gone into a market overseas and really, really done the research properly. So Zara, for instance, a huge Spanish multinational apparel business, has done an amazing job going international.” From a financial perspective, the risks can be more immediate. Contracts may be structured in ways that favour the buyer, or require levels of working capital that the exporter cannot sustain. “These are avoidable issues,” Ling says. “but only if they’re addressed early.”

The importance of human capital
Beyond strategy and finance, one factor underpins every stage of international expansion: people. “Access to the right skills is one of the biggest challenges,” Ling says. “Language, cultural understanding, local networks – it all matters.” For smaller businesses, this can be particularly difficult. Unlike large multinationals, they rarely have dedicated teams for each market. Instead, existing staff must adapt quickly to new demands. Carroll highlights the strain this can place on organisations. “You might have someone who’s comfortable dealing with France,” he says, “then suddenly they’re working with Japan. The skill set required is completely different.” Building that capability – whether internally or through external partners – is essential. Historically, international expansion often depended on personal networks. Success was driven by who a business knew, rather than what systems it had in place. That model is changing. “What we’ve done is industrialise and professionalise that support,” Ling says. “It’s no longer just about individual  relationships – it’s scalable.” This shift is being accelerated by technology. Digital tools are making it easier to assess market demand, learn from past mistakes, and streamline processes that were once paper-based. Carroll sees this as a democratising force. “Technology allows smaller businesses to do things that previously required large teams,” he says. For Santander, supporting international expansion comes down to three core areas: market selection, planning, and connections. Choosing the right market is the first step. Not every product suits every geography, and identifying where demand exists is critical. Planning follows. Businesses must understand the practical steps involved – from regulatory requirements to logistics and financing. Finally, there are connections. Trust remains a central issue in international trade, and identifying reliable partners is often the hardest part. “Knowing who to trust overseas is crucial,” Carroll says.

A long-standing system  – still evolving
Despite the complexity, global trade is not uncharted territory. The frameworks governing it have been in place for decades. “There are well-established rules and systems,” Ling says. “They’re designed to support trade and manage risk.” But in a shifting geopolitical environment, those systems are under pressure. Trade patterns are evolving, and businesses must remain adaptable. For UK businesses, the case for international expansion is clear. Growth, innovation and resilience are all stronger among companies that look beyond domestic markets. But success is not automatic. It requires preparation, early engagement with specialists, and a willingness to confront complexity head-on. It also requires investment – in people, in knowledge, and in the systems that support global operations. As Carroll puts it, “Trade isn’t unknown. The challenges are there – but so are the solutions.” The difference lies in knowing how to navigate them.