By Daniel Hunter
More a third (36%) of small businesses have no interest in exploring overseas markets, according to research by KPMG and YouGov.
The survey of 1100 UK SMEs found that complex legal regimes, followed closely by not having strong enough networks with overseas organisations and lack of tax incentives were the main barriers preventing small businesses from taking advantage of the huge growth potential offered by overseas markets.
The challenges were less pronounced for mid-sized businesses where just 20% of respondents said that they had no interest in exploring overseas markets. Currently only 17% of UK medium-sized businesses generate revenues outside of the EU compared to 25% in Germany and 30% in Italy. According to the CBI, businesses are 11% more likely to survive if they export.
Kevin Smith, senior partner for KPMG’s national market practice in London, said:
“It is not surprising that SMEs who have survived the global recession are choosing to focus solely on the domestic market in the UK, but it is short-sighted given the huge appetite for British goods and services abroad.
“Making the leap into overseas markets is not nearly as daunting as it seems on paper. There are some great success stories of SMEs who have achieved massive growth by successfully moving to overseas markets. Linking in with organisations who run trade missions overseas or have good networks abroad is the first step on a journey that is not nearly as complex as SMEs believe it to be and the rewards can be huge.”
This week is Export Week (10th — 14th November) where UK Trade & Investment (UKTI) will provide advice and support to small and medium businesses on how to enter new international markets with 90 events across the UK and over 6,000 businesses expected to attend.
Dominic Jermey, Chief Executive of UK Trade & Investment, said:
"The UK is a trading nation. But if we are going to double our exports to £1 trillion by 2020, we need our SME community to explore international trade.
"With developments in e-commerce; access to UKTI's armoury of advice, funds and support and the popularity of the British brand, the world is your oyster when it comes to global trade.
"It is disappointing to see that there is still reticence among both the small business community and the larger firms to explore all options when it comes to international trade. With decades of experience in working with businesses of all sizes, there is always support from UKTI which can prove invaluable to ambitious, expanding businesses.”
According to the KPMG/YouGov data, SMEs in the North East are the least interested overseas expansion (47%) whereas London based businesses were most likely to be exploring overseas opportunities with four in five looking abroad for new growth potential.
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