While much of the discussion on travel restrictions easing has been centred on the UK’s travel and holiday market, new research shows the enormous impact lifting travel restrictions could have for UK small businesses.
Following changes last week to the traffic light system for travel – with 36 countries or territories now on the green list – the new Hitachi Capital study of 1,500 directors of UK small businesses found that 43% were looking at regions outside of the UK to grow their business, equating to just over 2.5 million businesses in the UK.
Comparing the responses to those formed before the pandemic, the data shows the proportion of enterprises looking to do business in the UK domestic market has fallen (to 81% to 77%) whilst those looking for business opportunities overseas has risen from 41% to 43%. In some industry sectors there have been significant rises in the percentage of small business looking to secure growth from overseas markets – rising from 52% to 62% in the media sector and from 48% to 58% in the transport and distribution sector.
EU countries topped the list of regions where entrepreneurs wanted to do business. Of those looking to secure growth overseas, more than half (54%) were looking to invest in the EU – a significant increase in the proportion 18 months previously (47%). Similarly, European countries not in the EU featured high on the ranking list (31%).
Of those small businesses looking to do business overseas, 46% were looking to North America, and following the recent free-trade deal with Australia, 23% of small businesses looking overseas were considering opportunities down under.
The research showed that growing businesses were twice as likely to be considering overseas opportunities than non-growing businesses (66% vs 33%).
London-based small businesses, were found to be almost twice as likely to rely on opportunities overseas than other parts of the UK – notably Wales (29%), East Midlands (32%), and West Midlands (37%).
Joanna Morris, Head of Insight at Hitachi Capital Business Finance comments: “The evolving progress being made in lifting travel restrictions is another step forward in rebuilding business confidence after a torrid time for many small businesses. While quarantine regulations were an essential measure in keeping us all safe, they have inevitably impeded the ability of many small businesses to make deals, scout opportunities, expand a team and, ultimately, to secure growth.
“This has had an impact on both the growth of individual enterprises, but the UK economy as a whole. While technology has enabled businesses to continue to operate, there have been limits to what is achievable when face-to-face meetings aren’t an option.
“The easing of travel restrictions is welcome news for small businesses for so many reasons. As confidence levels continue to return, more and more plans that had been pushed back can now be given the green light. Confidence breeds confidence, and with this comes the ability for small businesses to plan beyond the pandemic to a five, 10 or 20 year horizon. At Hitachi Capital we are gearing up to help small businesses rebuild, to invest in growth and to fulfil their true potential.”