35% of small businesses in the North West shun overseas expansion
More than a third (35%) of small businesses in the North West have no interest in exploring overseas markets according to research by KPMG and YouGov.The survey of SMEs in the region found that complex legal regimes, followed closely by a lack of understanding of international markets and a lack of funds were the main barriers preventing small businesses from taking advantage of the huge growth potential offered by overseas markets.
Across the UK 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.Commenting on the findings, Richard Evans, office senior partner, KPMG Preston, 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.
Clive Drinkwater, UKTI North West regional director, added: “It is understandable that the prospect of exporting is daunting for companies who have never traded overseas before, but the benefits are too great to ignore. The UK has only 0.8% of the world’s population – why not reach out to the other 99.2%?“As well as expanding your potential customer base and therefore profits, exporting can actually make you a better business. Research shows that firms that start to export boost their productivity by an average of 34% and will be 12% more likely to survive. They will be more competitive and will use their new skills to sell more in the UK as well as becoming 75% more innovative and carrying out more research and development. “These statistics are a real vindication of why we work with firms to get them exporting. Whatever the perceived barriers, UKTI can offer tailored help and advice to help companies prepare for international trading and find markets that are suitable for them, and we would encourage businesses to get in touch and see how we can help.”