New research has uncovered small and medium-sized businesses trading internationally have grown at almost twice the rate as small firms selling within local markets.
The study, carried out by the government’s export credit agency, UK Export Finance, found that firms trading domestically experienced an 8.4% growth rate over the last five years, compared to 15.2% for those exporting internationally.
The survey, which quizzed 1,000 UK SME’s, also uncovered that almost half of those exporting businesses said trading internationally increased profits by up to 20%, whilst for 9% of firms, exporting increased profits by over the 20% mark.
Despite the opportunity to expand into new, less saturated markets, as well as improving bottom-line results, 19% of SMEs say they believe they’re ready to export but choose not to do so, citing challenges over managing export procedures, paperwork and also finance issues due to delayed payments.
Secretary of State for International Trade, Liz Truss, commented that: “Finance is a key barrier coming between SMEs and their export potential. If small businesses were to export more, Britain would see even more stronger economic growth.
“In its centenary year, UKEF continues to enable companies from across the UK to expand their global reach by helping them succeed abroad. That’s why it is at the heart of my plan to get businesses ready to trade as we leave the EU.”
Despite this, the opportunities for SME exporters are evident, with research finding that businesses with fewer than 50 employees have seen the fastest revenue growth through exports, and higher average growth annually (10.9%) compared to non-exporting firms (7.4%).
Opening a world of opportunities
Despite strong global trade headwinds, ongoing trade wars between the US and China and the little matter of Brexit, exporting has been a success story for British businesses over the last four years. In the 12 months to May 2019, overall exports grew by 4% to surpass £647 billion – the highest levels on record – whilst the number of exporting manufacturers also grew to their highest levels in over a decade.
If your business is considering broadening its horizons and looking to expand into the international marketplace, conducting thorough market research and analysis, devising an entry strategy and understanding how to mitigate the challenges that international trade can arise are critical to ensure early-years success.
Find out how Go Exporting’s international trade services can help your company make a success of exporting and open a world of opportunities here.