It’s not just the North’s football teams that span the globe

The North of England has long been an outwards-looking place. Its ports and factories hummed during the Industrial Revolution. Its music is played worldwide, with Beatles cafes found from Tokyo to rural towns in Cuba. However, it’s the region’s football that is perhaps best known across the globe. Manchester United, Manchester City, Liverpool, Everton, Newcastle and Leeds boast supporters in every country in the world, with their games watched by fans huddled around screens in cafes in the Gulf, hawker centres in Singapore and bars in South Africa, no matter the time. United alone claim 325 million fans in Asia, its constantly growing fanbase seemingly unperturbed by the club’s diminishing success. Today, these clubs not only boast fans and players from around the world, but owners too. City and Newcastle have deep-pocketed owners from the Middle East, while United and Liverpool are owned by Americans.

This internationalism expands beyond the beautiful game. The region’s SMBs have their sights set far beyond their region, and even Europe, with their expansion mirroring the global reach of local teams. Of all Northern SMBs planning to expand abroad in the next twelve months, 32% have their sights set on North America, while 30% are looking to the Middle East. The EU is being eyed up by only a similar number, 32%, despite it being the closest geographically.

This reflects a broader economic trend. Following the fallout of Brexit, and larger macroeconomic trends, businesses in the region are eyeing up growth away from Europe. The truth is that Europe's allure has been partially overshadowed by the dynamic prospects offered by markets like North America and the Middle East.

Home to world-leading strategic industry hubs, such as Silicon Valley for technology and Wall Street for finance, the US offers clusters of concentrated expertise and resources, encouraging collaboration and growth – something extremely attractive to smaller enterprises. Similarly, the Middle East is an attractive market for expansion, underpinned by its favourable business climate and tax incentives, with some of the lowest corporation tax rates in the world. This is all spearheaded by economic diversification initiatives like Saudi Arabia's Vision 2030. However, this expansion comes with challenges for SMBs that have limited resources and might be new to the markets.

Local regulation provides one headache. For instance, America’s highly federalised system means each state can have a different set of rules for businesses to get their head around. Across the Gulf, regulation varies and standards and expectations can get lost in translation. Data security, for instance, offers one major headache - with local regulation similar to the EU, but varying slightly by state, all while heavy fines await those that fail to comply. These hurdles are manageable for big businesses with compliance teams and local offices, but can be hugely tricky for resource-strapped SMBs.

Customs and norms can provide another barrier. Doing business in Riyadh is very different to doing business in San Francisco. For instance, Saudi business tends to have a strict respect for hierarchy and conversations can be very frank. While this can be the case in some meetings in America, conversations may be less direct, while the hierarchy can be unclear at some young startups that pride themselves on a ‘flat structure’.

Then, of course, there are external factors that are beyond an SMB’s control. We live in challenging times and a geopolitical flashpoint can turn a business plan upside down. These risks cannot be controlled, only prepared for. What’s more, inflation and energy costs eat at businesses’ bottom lines, turning some expansion plans from profitable to unviable.

Finally, there is the unglamorous but highly important issue of payments. A quarter of Northern SMBs have been put off expanding abroad by the cost of international payments, with margins eaten away by FX fees and marked up exchange rates. This is an issue when operating between the US and the UK, but it is even more acute when trading with the Middle East, with Qatar, UAE, Kuwait, Saudi Arabia, and Bahrain all using different currencies.

At Wise, we aim to help businesses manage this challenge by providing a service that only charges a small, up front fee for international payments - with no mark up in the exchange rate. However, big banks still aim to dupe SMBs by hiding fees. While it would be nice to imagine a world in which banks lead the change, what’s needed is tighter regulation. When trading outside of the EU, businesses are supposed to be protected by the Payments Services Regulations, which demand that banks are transparent about the fees they charge. These rules, already patchy, barely apply to SMBs, with banks able to exploit a ‘corporate opt out’ that eliminates any need to be transparent about payments fees.

Come Saturday at three o’clock, fans from across the globe are glued to the prospects of teams from the North of England. Yet year-round, these clubs’ cities are home to businesses that are seeking new prospects in every corner of the world. Their ambition and graft is admirable, while their success reflects the region’s strengths. As the world’s economy grows and diversifies, this expansion is only going to continue and become more important. Whether United’s loyal global fans ever see another title is less certain.