By Max Clarke

A new report from the FSB shows that a quarter of small businesses export but are stifled by red tape and currency fluctuations

One in three businesses find red tape and bureaucracy one of the main challenges when exporting their products, a new report from the Federation of Small Businesses (FSB) has found.

Almost a quarter (23%) of FSB members surveyed currently export products and services but are put off by red tape and bureaucracy (32%), fluctuating exchange rates (48%), worries they might not get paid (25%) and difficulty in finding customers (23%).

The Government has hailed exporting as a potential driver for economic growth over the next few years. FSB research in 2009 indicated that only 10 per cent of annual sales from small businesses went to countries outside the UK, but recent research shows that almost 23 per cent of small businesses currently export and there is good potential for further growth.

Of those businesses that export, almost two thirds (59%) export manufactured goods and 42 per cent services. Most firms (87%) currently export to Europe, followed by the US (45%) and Canada (25%).

The FSB is calling for more targeted promotion of the support available to encourage more businesses to export, in its report, ‘Made in the UK: Small businesses and an export led recovery’.

High street banks are the first point of call for many businesses for advice on how to export, but no businesses have utilised the Services Directive which came into force in 2009.

It is clear that more effective and targeted promotion of the support available would benefit all small firms, especially those doing a little and wanting to do more. In fact, businesses have said that this would be more beneficial than tax breaks and added private sector finance.

The FSB recommends:

* More effective promotion of Government assistance available through UKTI, particularly the Passport to Export Scheme which helps businesses to export for the first time, as well as more tailored information on the support available for small manufacturers
* An information campaign to be put in place about the benefits of the Services Directive and the benefits and availability of the web portals.
* The Government and private sector to implement a trade credit scheme for small businesses
* The Ministry of Defence to work closely with businesses organisations to distribute information relating to opportunities in the defence industry to a wider range of businesses.

Mike Cherry, Policy Chairman, Federation of Small Businesses, said:

“With the UK economy in fragile recovery, a number of well targeted initiatives could be just the ticket that small business exporters and Government are looking for to help the private sector led recovery.

“Manufacturing and defence are two sectors which offer big opportunities for small firms to export, but more effectively targeted information on the support that is already available is vital if small businesses are to be successful.

“The Services Directive offers huge potential in breaking down barriers to the single market, yet no small businesses surveyed were aware of it. With effective communication small firms can make more of this legislation and the opportunities it offers.”