The latest update to the SME Confidence Tracker from Bibby Financial Services (BFS) suggests most entrepreneurs in the UK lack confidence in exporting their goods and services overseas.
The Q1 2018 SME Confidence Tracker revealed that 66% of small firms across the UK traded in domestic markets only, but only 20% were importing and exporting to consumers and businesses abroad.
Less than one-in-ten (7%) of small businesses surveyed said they solely import from overseas, while the same amount said they focus on exporting their products around the world. Separate research from BFS in November 2017 found the USA, France and Germany were the most important markets to British exporters. Meanwhile China, Germany and the USA were said to be the key markets for British importers.
Worryingly, two-fifths of respondents who aren’t currently exporting demonstrated no appetite to do so in the coming months, with 28% fearing their goods and services aren’t fit for global markets.
Just one-in-ten confirmed they plan to invest in their capabilities to trade overseas in the next quarter. The latest figures suggest that something needs to be done to help the UK’s ambitious and innovative small firms overcome the complexities and fear of trading worldwide; supporting them in identifying opportunities and markets that their products could thrive in.
Kash Ahmad, Specialist Director, BFS, said: “The ‘Made in Britain’ stamp is a sign of quality assurance worldwide and has huge credibility in overseas markets.
“However, our research shows that many small and medium-sized businesses are either sceptical over the benefits of exporting, or do not believe their goods and services can be sold internationally.
“There are fantastic support services to help SMEs overcome the complexities of trading internationally from organisations such as the Institute of Export and International Trade and the British Exporters Association.”
Despite these trading concerns, there is cause for optimism among those that are exporting. The number of small UK exporters anticipating sales increases in Q2 2018 is up 50% on the previous quarter.
With small businesses still very much the backbone of the UK economy, Mr Ahmad believes British entrepreneurs must play a key role in upcoming discussions regarding the nation’s impending exit from the European Union (EU).
“While there is still a long way to go in negotiating the UK’s split from the EU, it is imperative that SMEs are kept at the heart of future discussions,” said Ahmad.
“This really needs to start with a review of how the Government can encourage business owners to leverage exporting opportunities presented, both inside and outside of the trading bloc.”
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