A new survey has revealed that nearly six out of ten UK SMEs are currently considering establishing their businesses overseas as a way to drive growth. This is according to the Newable’s inaugural Overseas Expansion Barometer which surveyed over 300 companies.
In terms of markets, almost one third (27%) of respondents selected the US as their preferred market destination. This was perhaps unsurprising given that the US is the world’s largest economy and the UK’s single largest trading partner. The US was significantly ahead of France (6%), China (4%), Australia/New Zealand (2%) and India (1%).
Despite 58% stating they are open to launching overseas, just 41% of respondents admit to a lack of confidence in how to go about it. An overwhelming 68% expressed unfamiliarity with the regulatory risks associated with overseas expansion for example.
General enthusiasm to expand was tempered by a number of concerns. Brexit remains the prevailing fear according to 22%. Unknown costs associated with establishing a business overseas was the second biggest worry for 21% of respondents. Other topics worrying SMEs included regulation (15%), risk of failure (10%), lack of in-house expertise (8%) with economic uncertainty, management time and commitment, access to finance, and recruitment challenges also featuring.
Legal advice was overwhelmingly identified as the most useful form of advice when setting up overseas, with 46% selecting it as its first choice. Market and finance advice were identified by 19% and 16% of respondents respectively, followed by industry advice, employment advice and other.
Importantly, SMEs recognise that help is at hand: 45% stated that Government organisations (Gov UK or the Department for International Trade) represented the best form of advice.
Chris Manson, Chief Executive of Newable said, “With an important Brexit milestone now approaching, attention will turn to how UK companies are placed to expand their business overseas. Our survey shows that many SMEs harbour the ambition, and many have identified the US as the land of opportunity.
“Equally, many SMEs currently see it as a ‘leap into the unknown’. The good news for SMEs is that help is out there. Newable is proud to support the excellent work that government organisations, namely the DIT, are doing. America Made Easy is a service that is designed to de-risk overseas expansion for SMEs.”
303 SME professionals took part in the inaugural edition of Newable’s Overseas Expansion Barometer. 74% of respondents were senior figures at their organisations which is defined as director or above. Produced by Newable, the leading provider of space, money and advice to businesses working at the heart of the economy, the Barometer explores attitudes towards key issues surrounding overseas expansion including geography, regulation, finance, management, legal factors, recruitment and more.