Small UK companies are starting to export far earlier than previously, research finds.
Of SMEs currently exporting, nearly two thirds (65 per cent) of those set up during the period of 2007 and 2014 started trading overseas within their first year of business.
This compares to just 34 per cent of businesses set up before 2007 that had traded abroad within their first year.
The research from Barclays finds that growth was the top driver to export for small businesses set up between 2007 and 2014 (43 per cent) alongside a recognition of demand for their service overseas (42 per cent).
Young businesses saw overseas demand up 7 per cent more than SMEs starting in the period of 1997-2006. Another factor in the decision to export was the declining UK economy, named by 15 per cent of SMEs set up between 2007 and 2014. For pre-recession businesses (set up before 2007) this number fell to 12 per cent.
More than a quarter (26 per cent) of SMEs set up in the last seven years state they had reached their UK growth ceiling within just one year.
Some 42 per cent of SMEs formed before 1990 and currently exporting say they wish they had started exporting sooner. However, despite missing out on earlier opportunities to export, ambition for future growth is highest for businesses established pre-recession (1997-2006) attributing the greatest proportion (16 per cent) of their predicted growth in the coming year to exporting.
Steve Childs, head of international for SMEs at Barclays says, ‘The case for exporting is strong given the growth potential it offers. It’s therefore interesting that the research shows a shift in the time when small business started their export journey, depending on the period the business was formed and against the backdrop of UK economic cycles.
‘It shows that ‘younger’ businesses whose outlook on UK economy may have been shaken by the events following 2007 and 2008 have set their sights on overseas horizons right from the start and making a success of this.’
Childs adds that businesses started before this time have taken a slightly more measured and cautious approach to exporting.
The research also reveals that ‘younger SMEs’ have benefitted from getting to grips with social media. A quarter (24 per cent) of businesses formed between 2007 and 2014 and already exporting say that the emergence of social media such as Twitter, Facebook and LinkedIn has helped sales overseas, while this figure was much lower for all SMEs established before 2007 (8 per cent).