A campaign by UK Trade & Investment (UKTI) is encouraging British SMEs to export in the hope that this will strengthen the economy and generate growth. Most small British firms remain hesitant to break into international markets, however, due to a perceived lack of resources. Overseas expansion has the potential to propel SMEs to success, so should small business owners be considering it further?
Government says ‘exporting is great’
UKTI’s ‘Exporting is GREAT’ initiative aims to get 100,000 more companies exporting by 2020, and has a particular focus on SMEs. The scheme will provide advice and expertise to those looking to expand, and if successful, will overcome small businesses’ reluctance.
Stephen Kelly, CEO at Sage, is optimistic about the campaign’s impact. “Exporting is a significant step on the [growth] journey,” he explained, “[but it’s] one that many small and medium businesses don’t feel they have the support or knowledge to take.”
A recent poll by YouGov for EasyJet found that just 50% of SMEs plan to export their products or services in the coming year, and as many as 60% don't export to Europe’s open market. One of the biggest barriers to foreign market penetration for small firms is a lack of government help – ‘Exporting is GREAT’ is intended to address this issue directly.
The implications of staying put
While a shortage of resources is undoubtedly a key consideration, there are several other reasons why SMEs are daunted by exporting. Trading with non-English speaking countries poses potential language barriers, and each region is likely to require new administrative processes. Fortunately, such concerns can be partially alleviated by trade missions and, now, increased government assistance.
Choosing not to export inevitably caps growth potential. While the UK market is a reasonably-sized starting point, the whole EU has a population of 740 million plus – a resource worth tapping into.
At the same time, however, SMEs must consider the downsides to international trade. Efficient resolution of issues surrounding late payment culture is more difficult when international borders are crossed, for example.
Businesses experiencing problems with late payments within the UK, meanwhile, can call on Dukes Bailiffs. If you work for a small firm and want to know how ethical and transparent debt recovery could give you a boost, get in touch and we’ll be happy to help.