New report shows
Some 1.3 million UK SMEs are looking overseas to fuel growth in the next twelve months, according to research published by CitySprint.
CitySprint’s annual survey of decision makers and owners at UK SMEs, finds that a quarter (24%) of SMEs say they plan to look overseas to grow their customer base over the cominh months.
Despite Brexit, the EU remains a key market; of those looking at international trade this year, Europe (78%), North America (55%) and Asia (36%) are the top regions cited.
Some sectors are also more actively banking on overseas trade than others; SMEs in the arts & culture industry (37%), IT & telecoms (36%), retail sector (32%) and manufacturing & utilities (30%) are all planning above-average levels of international growth.
The capital could be in danger of losing its status as one of the cradles of the UK’s smaller businesses. London SMEs remain in good health – reporting above average levels of confidence in the future of their business and being in a better financial state when compared to 12 months ago.
However, both of these figures have dropped significantly since those recorded in 2015. SMEs in Leeds and Nottingham appear to outstrip their London counterparts in terms of financial health this year, while those in Nottingham also report greater confidence in the future.
Patrick Gallagher, Group CEO at CitySprint Group, commented on the findings: “The UK’s smaller enterprises show no shortage of ambition when it comes to exploring new markets. While overall SME confidence has dropped since 2015 it is great to see so many SMEs, especially those outside of London, showing no fear in the face international opportunity.”
The research highlights that SMEs view lower customer demand and Brexit as the top two obstacles to success in the 12 months ahead, making unlocking new markets of critical importance. Over half of SMEs are also looking closer to home to achieve this; 52% in the survey say they are looking to grow their customer base nationally, i.e. within the UK, in the coming year.
Mr Gallagher continued: “Many UK SMEs are also ‘exporting domestically’, within the UK but beyond their local area or town. Whether it’s going global or taking trade nationwide for the first time, scaling up is a huge milestone in any organisation’s history. It needs to be done thoughtfully and with care – but it doesn’t have to be done in isolation. SMEs must work together to realise their goals.”
Supporting this appetite for new growth in the UK and overseas are signs that SMEs are upping their sales and marketing activity, with more than two in five (42%) saying they plan to increase this in the next 12 months to best ensure the success of their business. Just over a third (37%) are balancing this with a focus on their core customers.
However, only 13% of SMEs plan to prioritise collaboration or partnership with other SMEs, despite data from previous Collaborate UK research highlighting that those that value this activity report greater financial performance and overall confidence in the future.
When asked what’s stopping collaboration, a third (32%) said it just isn’t a priority for the business, with concerns around competition (28%) and sharing data or other confidential information (25%) also cited. More reassuringly, almost a quarter (23%) of SMEs have upped their collaboration efforts with other smaller enterprises since Article 50 was triggered in March 2017.
Mr Gallagher continued: “Working with other organisations requires bravery and transparency, but it is a vital tool in any businesses armoury. Especially for those looking to unlock new markets. Local organisations on the ground may be ideal partners to help make this an easier and smoother transition.”