March 16, 2015, by Kelly Cookson

Is international activity of UK SMEs due to increase in 2015?

Research released by Western Union Business Solutions on 12th January 2015 revealed that a third of UK businesses expect to grow in their international activity in the year ahead.

In light of these findings, in the January 2015 Business Barometer survey our panel of UK SMEs and business advisers were asked about the likelihood of an increase in international trade activity among their businesses and clients over the next year.

We also asked about the current percentage of revenue generated by exports within these businesses.

The responses from small business owners were as follows:

Amid reports of increasing international activity, how likely are you to increase your business’s international activity over the next 12 months?
Highly likely	13.6%
Likely	25.8%
Unlikely	21.2%
Highly unlikely	12.1%
Not applicable	27.3%

 

Do you plan to increase the number of countries that your business deals with over the next 12 months?
Yes	27.3%
No	43.9%
Not applicable	28.8%

 

What percentage of your current revenue comes from exports?
0%	42.4%
Less than 10%	25.8%
10% to 20%	10.6%
21% to 30%	4.5%
31% to 40%	1.5%
41% to 50%	6.1%
More than 50%	7.6%
Don’t know	1.5%

 

These figures largely correlate with those released by Western Union Business Solutions: while the majority of businesses plan no changes, around a third are considering an increase in international activity over the next year.

Panellist Alasdair Stamps of Meeting Mojo Ltd promoted the benefits of international trading within his business: “The experience of more than 6 years’ international trading has been both rewarding and successful. We have had almost no problems with culture or language barriers, no bad debts and an overall positive experience of doing business with international customers”. The benefits also went beyond a financial realm: “We’ve also gained invaluable feedback leading to massive improvements in our products.”

Another commenter, Mike Hunter of Better Languages, also evidenced the benefits of international links: “We have had a record year for sales, and a key component has been success with direct overseas sales… Our advice to other SMEs would be that exporting really can be critical to business growth”.

UK business advisers were asked about the international activity of their clients:

How likely are the businesses that you advise to increase their international trade activity over the next 12 months?
Highly likely	5.6%
Likely	29.6%
Unlikely	45.1%
Highly unlikely	8.5%
Not applicable	11.3%

 

Do the businesses that you advise plan to increase the number or countries that they deal with over the next 12 months?
Yes	25.4%
No	50.7%
Not applicable	23.9%

 

What percentage of your clients’ current revenue comes from exports?
0%	15.5%
Less than 10%	47.9%
10% to 20%	16.9%
21% to 30%	0%
31% to 40%	7%
41% to 50%	1.4%
More than 50%	0%
Don’t know	11.3%

One advisor suggested that hopes of increased trade activity were not realistic for many small businesses: “Most of my clients are sole traders or micro businesses with sales of £30k to £300k per annum and are fighting to stay afloat. They do not have the time, money or staff to look at exports.”

Inversely, another commenter suggested that this was not the case and that instead start-ups were unaware of their international potential: “Previous experience with existing businesses showed that many owners of micro businesses had not realised that they had the scope to export and that there might be support via Enterprise Europe of UKTI or both… It’s an area where face-to-face advice/support is far more effective”.

The UK Business Barometer and UK Business Adviser Barometer surveys are run by the Haydn Green Institute for Innovation and Entrepreneurship. The results of the surveys are instantly processed and posted on their respective websites: www.ukbb.ac and www.ukbab.ac

Businesses and advisers wishing to contribute as panellists on the project can register via the websites.

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