Small businesses in Britain are calling out for more effective support to achieve their international trade ambitions, with nearly three quarters (73 per cent) of would-be exporters held back by a lack of international business experience and knowledge, according to new research.
The report from HSBC, titled Exporting for Growth: the SME Perspective, surveyed over 1000 UK SMEs, some already exporting and some planning to start.
Many of those considering exporting feel a limited understanding of local markets (68 per cent) and a mire of complicated regulation in the destination market (63 per cent) is stopping them from taking their products and services overseas. As a result, less than half (45 per cent) of SMEs not exporting think overseas trade will be important to the growth of their business.
Mark Emmerson, HSBC head of global trade and receivables finance UK, thinks Britain is full of dynamic entrepreneurs who want to look beyond their own borders but amid Brexit uncertainty, they’re struggling to see how it can be done.
He says, ‘Businesses often feel the resources they need can be hard to find. Encouraging exports is a win-win for the British economy and its small businesses, so we must work together to help support SMEs take their businesses global.
‘In fact, there is a clear need for both government, banks and businesses to do more to give SMEs the bespoke support they need to flourish globally.’
Based on the findings of the report, HSBC has identified three areas for government, business and the financial sector to consider in order to encourage more SMEs to take their business global.
Support for businesses
First, cut through the complexity for small businesses by offering a more tailored, user-friendly hub of services. 93 per cent of would-be exporters surveyed know that help is available to them from government bodies such as the Department for International Trade, but only just over half (54 per cent) are actually engaging with those services, and find the range and volume of services available baffling.
For example, more tailored, on-the-ground support from government and agencies would encourage 64 per cent of SMEs who are thinking about exporting to get started.
Trade Negotiations
As the lines for international trade are redrawn in the coming years, 58 per cent of exporters are concerned about potential tariff increases amid worries the UK will struggle to negotiate trade deals.
In addition, they are almost as concerned with non-tariff barriers such as legal and regulatory requirements (53 per cent) and customs co-operation (48 per cent). A lack of experience within the UK in trade negotiating free-trade agreements is a worry for 60 per cent of exporting SMEs, and 55 per cent fear delays in the UK reaching new trade deals.
To allay these fears, policymakers would benefit from setting up and taking counsel from an advisory group of SME exporters. They can help advise on how to tailor trading arrangements to get the best for their businesses.
Share best practice
Almost three quarters of future exporters (71 per cent) surveyed say that having the opportunity to learn from businesses currently exporting would encourage them to do so.
David Lockwood, managing director of Neal’s Yard Dairy, believes that they would have been lost without the guidance of other businesses.
Lockwood says, ‘While we learnt a lot of valuable lessons along the way, they gave us the confidence and knowledge we needed to get started. Now, exporting makes up 40 per cent of our business. There’s a huge amount of information and expertise available from a huge range of sources, so collaboration is essential – particularly among the exporting community.’
By contrast, among those businesses already exporting, 73 per cent recognise how important international trade will be for business growth. Over a fifth (22 per cent) say that more than half of their revenue is generated by exports. Their concerns lie not with their ability and skills to succeed, but focus instead on the business environment they are working in.
Emmerson, concludes, ‘Perception is often worse than reality when it comes to exporting. In our experience, once they take that first step, many SMEs find that it isn’t as difficult as they had feared. What’s needed is reassurance and guidance through those early days. It is therefore vital that those already there offer a hand with crucial support, experience and advice.
‘That said, collaboration is a necessity. It’s important to make sure policy makers also have access to the insight and experience that SMEs have, so they’re informed as can be when they begin trade negotiations.
‘We are all already united by a shared goal – to ensure British exports flourish – so it’s time to work together and step up our exporting game.’
Further reading on exporting
