Recent research carried out by The Small Business Research Centre and Barclays Business indicates that small businesses that export are growing faster than those who simply serve the UK markets. Their report follows a survey of 1000 owner managers across the UK, plus detailed qualitative analysis by the academics.
The results showed that the highest proportion of those who did business overseas were London based, an unsurprising trend given the city’s global reputation. Around 66% of all those who exported operated as manufacturers or retailers, many with online trading facilitating their ventures.
One aspect that surprises bookkeepers and business people is that some 68% of the survey reported that they had been exporting since day one. This contradicts the perception that most companies start local before moving on to overseas markets.
Another thing that might surprise you is that many exporters did not make strategic plans to move in that direction. They simply followed opportunities and ‘fell into it’. 59% were initially approached by contacts for overseas trade and 25% acquired the business by referrals. The report points out that they were being ‘reactive’, rather than ‘proactive’ and were therefore likely to be missing other opportunities.
Barriers and Challenges
Of course, an online presence means that you can be known around the world, and more likely to be approached from overseas. But it appears that the challenges of exporting put many businesses off actually pursuing trade across boundaries. The complexities of regulation cause fear of falling foul of them in other countries. The way the markets operate can be different to what you are accustomed to, and then there are the language and cultural issues to deal with. Finding agents and organising the logistics can also be daunting for potential exporters.
Your outsourced bookkeepers will be in agreement with the report which recommends that small businesses ‘need to know where to look for immediate assistance and which sources of advice can be exploited to maximise opportunities quickly. From a policy perspective, agencies responsible for export promotion, public and private, need to market their services clearly to SMEs and be able to provide appropriate SME advice on a responsive basis. This would include information on, for example, country-specific rules and regulations; together with information on currency exchange management from financial service providers; as well as presenting cases on how it has been done by similar SMEs.’
Nevertheless, the report’s initial finding that exporting is proven to be assist growth makes it well worth considering whether there are any overseas opportunities for you.