By Daniel Hunter
South West-based small and medium-sized enterprises (SMEs) remain committed to trading internationally and continuing to seek out new opportunities overseas, new research from HSBC Commercial Bank reveals.
Of those South West-based SMEs that are currently trading overseas, over a third (35%) are looking to increase the number of countries in which they operate or have connections, whilst nearly half (48%) stated their commitment to continue trading with existing international partners.
The opportunity to increase turnover is the overwhelming driver for South West-based SMEs to trade overseas, with nearly half of companies (48%) citing this as the main reason. A quarter of SMEs (26%) said increasing market share was a key reason for trading internationally, whilst one in five (22%) said it was to exploit untapped markets.
“Government figures show exports from the South West grew by nearly 12% last year to over £12 billion, and SMEs would have played a key role in that growth," Gary Burton, HSBC Regional Commercial Director for the South West and Wales, said.
"The South West is home to a fantastic range of innovative and forward-thinking companies and this is demonstrated by their desire to both trade international and broaden the number of countries they trade with.
“The Government has recently announced an aim to double UK exports to one trillion pound this decade, and SMEs will play a big part in helping to reach that target. Our research highlights that small and medium-sized businesses are up for the challenge, and even newly created businesses recognise the benefit, and are looking to further increase their footprint overseas.
“At HSBC we forecast that UK international trade will grow by 60% over the next 15 years, so it is encouraging to see so many businesses positioning themselves to grow by taking advantage of international opportunities. Due to the critical role international trade will play in ensuring the future success of UK businesses and the wider UK economy, we recently launched the £4billion ‘HSBC International SME Fund’ to help SMEs who trade or aspire to trade internationally."
The research also found:
- Overall, 28% of South West SMEs are trading internationally;
- Eight times as many SMEs that are currently operating overseas expect to expand rather than contract the number of countries to trade with (35% vs 4%);
- 3 in 10 companies (30%) believe a lack of language skills is the main barrier to trading internationally;
- 18% of South West SMEs are looking to trade internationally because of limited domestic growth options.
Taking your business into a new market can be quite daunting. HSBC’s research also looked at the top 5 concerns SMEs have when starting to trade overseas that are:
- Securing payment from customers;
- Understanding the opportunity and being able to evaluate its success;
- Fluctuating currencies;
- Managing the logistics;
- Language barriers.
“Whether companies are looking to take their first step to trading overseas, or they are seasoned exporters looking to start in a new market, there is a network of advice, this includes HSBC’s international experts, Government support from UKTI, plus local Chambers of Commerce, who can advise on overcoming important concerns, and lead to successful internationalisation,” Gary Burton added.
Do you trade in other countries and do you want to raise the profile of your company? Then apply for the 2012 International Trade Awards and propel your business into new markets and accelerated growth. Now in their fifth year, the 2012 International Trade Awards sponsored by American Express Foreign Exchange Services is the only UK wide business awards to exclusively recognise the success of exporters, importers and those trading overseas.
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