Article by: Bibby Financial Services (corporate members)
UK SMEs are largely sceptical about exporting opportunities available to them, according to the latest SME Confidence Tracker from independent financial services provider, Bibby Financial Services (BFS).
The latest research for Q1 2018 shows that 66 per cent of businesses buy and sell domestically only, while a fifth (20%) both import and export, seven per cent import, and the same proportion sell goods and services overseas.
Of those not currently exporting, two-fifths say they have no interest in doing so, and 28 per cent believe the goods and services they provide are not suited to international markets. Just one in ten SMEs (10%) plan to invest in their international trade capability between April and July.
Scepticism over the benefits of export
Commenting on the findings, Specialist Director at BFS, Kash Ahmad, said: “The ‘Made in Britain’ stamp is a sign of quality assurance worldwide and has huge credibility in overseas markets. However, our research shows that many small and medium sized businesses are either sceptical over the benefits of exporting, or do not believe their goods and services can be sold internationally.”
The SME Confidence Tracker report surveys UK business owners, across manufacturing, wholesale, transport, services and construction sectors, on a quarterly basis. Separate research conducted by BFS in November 2017, found that the U.S., Germany and France were the most important markets to UK businesses exporting, with China, Germany and the U.S. most important to Britain’s importers.
Further help needed in identifying opportunities
Kash Ahmad said: “There are fantastic support services to help SMEs overcome the complexities of trading internationally from organisations such as the Institute of Export and International Trade and the British Exporters Association.
“However, it is clear that smaller businesses need further help in identifying opportunities to grow by trading internationally, and – importantly - support in understanding which international markets their goods and services could appeal to.”
Despite scepticism over the suitability of exporting – overall - the number of UK SMEs expecting sales to increase in Q2 jumped by 13 per cent, with half (50%) expecting to see an increase, when compared with expectations for the first three months of the year. However, over a third (36%) say they would back calls for Britain to remain in the Single Market and Customs Union.
Vital for SMEs to be at the heart of Brexit discussions
Kash Ahmad added: “While there is still a long way to go in negotiating the UK’s split from the EU, it is imperative that SMEs are kept at the heart of future discussions. This really needs to start with a review of how the Government can encourage business owners to leverage exporting opportunities presented, both inside and outside of the trading bloc.
“Whether for manufacturers in the Midlands, Scottish food and drink producers, or SMEs working in Wales’s growing creative industries, there are markets across the world crying-out for British goods and services. It’s imperative that support is available to help non-exporting SMEs to recognise and realise these opportunities.”