By Daniel Hunter
Barclays is calling on UK small to medium-sized enterprises (SMEs) to take a more global outlook and consider the growth opportunities that can come from exporting, as new research reveals that businesses hit a UK growth ceiling after an average of just four years in business.
This tipping point — the limit at which businesses realised they could no longer achieve desired business growth by trading only in the UK — was clear across all sectors, but at different times. Telecoms; and internet, media & entertainment businesses hit their limit at only two years, whereas logistics and retail businesses reached it at three. Manufacturing businesses found they had more time before needing to look abroad for growth opportunities; hitting their limit at eight years.
While the thought of taking a business overseas may seem daunting for some, the research, which surveyed 500 UK SMEs already exporting, provides encouragement for those yet to start.
Looking back on their experiences, over four out of five (86%) of SMEs already exporting said they found the experience to be as they hoped, or even easier than expected. This was especially true for retail (92%) and utilities (94%) businesses.
This could be in part because the majority now realise that a number of the factors that had held them back were psychological, rather than actual, barriers. 52% of those who said they wish they’d started exporting sooner said the reason they hadn’t done was because they either just ‘didn’t know where to start’, thought it would be ‘too complicated’, ‘didn’t think it would work’ or just ‘didn’t think to do it.’ Interestingly, this was most true for businesses in the South East (62%) and the East Midlands (65%).
Almost three quarters (70%) of financial services firms give these psychological reasons for not starting exporting sooner.
Having overcome those psychological barriers, almost half (47%) of SMEs now say they wish they’d started exporting sooner. This is most evident in utilities, logistics and pharmaceutical businesses, where 75%, 61% and 83% of businesses respectively say they wish they’d started exporting earlier.
Simon Nicholson, Head of International at Barclays Business banking, comments: “What strikes me about our research is how successful at exporting SMEs are. This is despite 60% claiming to have ‘fallen into it’, or only looking at it ‘when an overseas customer got in touch’. With such high growth opportunities, imagine the possibilities that could come from taking a more proactive approach!
“We are committed to helping UK SMEs trade confidently across the globe and call on them today to think more internationally with their business plans in partnership with their Barclays Business Manager.”
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