By Daniel Hunter
SMEs started during the recession are much more likely to start exporting in their first year than older businesses, according to research by Barclays.
Nearly two thirds (66%) of the so-called 'recession generation' currently exporting started trading internationally in their first year.
In comparison, just 34% of SMEs launched before 2007 started exporting in the first year.
The research found that growth was the top driver to export for small businesses set up between 2007 and 2014 (43%) alongside a demand for their service overseas (42%). The research demonstrated the rise in international appetite for UK products and services in the last seven years, with young businesses seeing overseas demand up 7% more than SMEs starting in the period of 1997-2006.
Another factor in the decision to export was the declining UK economy, named by 15% of SMEs set up between 2007 and 2014. For pre-recession businesses (set up before 2007) this number fell to 12%. Looking at international markets earlier was also attributed to growth limits- over a quarter (26%) of SMEs set up in the last seven years stated they had reached their UK growth ceiling within just one year.
A substantial 42% of SMEs formed before 1990 and currently exporting say they wish they had started exporting sooner. However, despite missing out on earlier opportunities to export, ambition for future growth is highest for businesses established pre-recession (1997-2006) attributing the greatest proportion (16%) of their predicted growth in the coming year to exporting.
Steve Childs, Head of International for SMEs at Barclays, said: “The case for exporting is strong given the growth potential it offers. It’s therefore interesting that the research shows a shift in the time when small business started their export journey, depending on the period the business was formed and against the backdrop of UK economic cycles.
"It shows that ‘younger’ businesses whose outlook on UK economy may have been shaken by the events following 2007 and 2008 - have set their sights on overseas horizons right from the start and making a success of this. Conversely the findings reveal businesses started before this time have taken a slightly more measured and cautious approach to exporting, though there is some regret from those that wish they’d grabbed the bull by the horns a little earlier."
The research also revealed that ‘younger SMEs’ have benefitted from getting to grips with social media. A quarter (24%) of businesses formed between 2007 and 2014 and already exporting say that the emergence of social media such as Twitter, Facebook and LinkedIn has helped sales overseas, while this figure was much lower for all SMEs established before 2007 (8%).
The recession is over. It's time to grow!
Join us from 19th – 20th November 2014 at the ExCeL Campus, London.
Register for your FREE Ticket today: http://britainmeansbusiness.today/get-your-free-ticket/
Join us on