Growth beyond borders for small businesses
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While headlines are focused on the country’s domestic economic challenges, UK businesses looking beyond our borders will be able to find opportunities for growth and reasons to be more optimistic. With recent GDP figures suggesting that the UK could face a prolonged period of economic uncertainty, it becomes even more important for businesses to explore new revenue opportunities. By having a geographically diverse income stream businesses reduce reliance on one market and can achieve growth where it might not be possible at home.
Research from the Social Market Foundation showed that the UK could generate £9.3 billion by helping more small and medium-sized businesses to export goods through e-commerce. To understand what these small businesses need to tap into this opportunity, we worked with the British Chambers of Commerce to survey its members on their feelings about the barriers and opportunities of going global.
Venturing further afield
The challenges for exporters presented by Brexit have been significant, but nearly two years on businesses have shown huge resilience and adaptability. Two thirds of the UK exporters we surveyed have managed to get to grips with the customs requirements of trading with EU countries, 9 per cent of those that have are now trading with new non-EU markets, and a further 9 per cent say they will now consider doing so in future.
Where global trade beyond the EU might have seemed daunting before, the experience businesses have gained from navigating the new complexities has given many of them confidence to take their business further.
Where next?
The US continues to be the largest market for UK exporters but Asian markets such as India are growing, and there’s appetite for British products and brands across the world. As trade deals are negotiated, this is an opportunity for businesses to explore even more markets.
Our research shows that most businesses haven’t fully engaged in what future deals could mean for them or what terms they would benefit from. While businesses are understandably focused on the here and now when it comes to exporting, it’s important their voices are heard in the early stages of trade deal negotiations. By talking to their trade bodies, government and businesses such as ours, their needs will be better represented at critical times.
It’s equally important to spend time becoming familiar with new deals and ones close to being finalised to maximise the opportunities. We know that the intricacies of trade agreements are complex, which is why we’ve teamed up with the Department for International Trade to delve into the detail in a digestible way. Our Global Trade webinar series breaks down the detail of the government’s latest trade agreements country by country, including New Zealand, Australia and Canada. For a lot of small businesses, entering other English-speaking countries is a good starting point for international expansions, particularly where tariff-free trade has been established.
Ease and speed are the priorities
While businesses may not have delved into the nitty gritty of the forthcoming deals, what they are clear on is that they want their trading journey to be straightforward and allow them access to new markets with ease and speed.
More than half (54 per cent) of respondents said “smoother customs procedures” would be a top priority for future trade deals between the UK and other countries, along with “lowering tariffs” (42 per cent) and “reducing technical barriers” (35 per cent).
SMEs give us all reason to be opportunistic
UK small businesses are talented and bold so with the right support and policies in place we should be optimistic about international trade – both the role it can play helping individual businesses come through challenging economic times and its impact on the wider economy.