SMEs continue drive to foreign shores
Of those SMEs who are currently trading overseas, four in ten (38 per cent) are looking to increase the number of countries in which they operate or have connections, with almost half 46 per cent expecting to continue operating in the same markets.
New businesses, those SMEs who are under one year old, also recognise the importance of looking to overseas markets, with one in five (22 per cent) already generating revenue from overseas sources. In fact 90 per cent of young businesses already with an overseas presence are looking to increase the number of countries they are trading with.
Jacques-Emmanuel Blanchet, deputy head of HSBC Commercial Banking UK and Europe, said: “The Government has recently announced an aim to double UK exports to one trillion pound this decade, and SMEs will play a big part in helping to reach that target. Our research highlights that small and medium-sized businesses are up for the challenge, and even newly created businesses recognise the benefit, and are looking to further increase their footprint overseas.
“At HSBC we forecast that UK international trade will grow by 60 per cent over the next 15 years, so it is encouraging to see so many businesses positioning themselves to grow by taking advantage of international opportunities. Due to the critical role international trade will play in ensuring the future success of UK businesses and the wider UK economy, we recently launched the £4billion ‘HSBC International SME Fund’ to help SMEs who trade or aspire to trade internationally.”
The research also found:
- Four times as many SMEs who are currently operating overseas expect to expand rather than contract their companies (38 per cent vs 10 per cent)
- 4 in 10 (40 per cent) started overseas trading in order to increase turnover
- One third of SMEs (32 per cent) decided to go international due to limited opportunities in the UK
- 15 per cent of SMEs are looking to grow market share by trading overseas, and 10 per cent are looking to become market leader.
Taking your business into a new market can be quite daunting. HSBC’s research also looked at the top five concerns SMEs have when starting to trade overseas that are:
- Securing payment from customers
- Understanding the opportunity and being able to evaluate its success
- Fluctuating currencies
- Managing the logistics
- Language barriers
Jacques-Emmanuel Blanchet added: “Whether companies are looking to take their first step to trading overseas, or they are seasoned exporters looking to start in a new market, there is a network of advice, this includes HSBC’s international experts, Government support from UKTI, plus local Chambers of Commerce, who can advise on overcoming important concerns, and lead to successful internationalisation.”
- Four SMEs win HSBC’s £200,000 competition
- International trade set to drive UK economic growth
- HSBC commits to UK SMEs in 2012
- HSBC launches £25million scheme for SMEs
- SMEs looking abroad to drive eCommerce growth
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