Export shortfall sees UK firms miss out on £141 billion
Small businesses in the UK lost out on £141 billion in the last year due to a lack of exporting, a new study by World First has revealed.
That figure represents more than the combined budgets for UK government spending on defence and health in the last 12 months.
The study also revealed that just 5% of businesses plan to start exporting in the next five years, despite attempts by the Government to encourage the sale of goods overseas.
SMEs that did trade goods and services internationally added more than £287,000 to their revenue during the last 12 months, according to the Thinking Global: The route to UK exporting success report.
One in ten businesses said that exporting had boosted their profits by 20% or more, highlighting what is achievable for firms should they expand to sell further afield.
To put those figures in context, if the 5% of SMEs looking to export decided to do so, it could add £33.7 billion to the UK’s gross domestic product and would provide a 6% boost to export levels for the 2015 economy.
World First CEO and Co-Founder Jonathan Quin has suggested that the Government needs to do more to support international development for businesses and hinted that a minister for scale-ups might help the issue.
A number of barriers were identified as potential issues for exporting, with culture and language differences both named as persistent problems.
Firms said language was a particular issue when trying to enter the Asia-Pacific and South American regions, named by 23% and 21% of firms respectively, alongside being the fourth highest barrier to entering the African and Middle Eastern markets – named by one fifth of firms.
In the case of the latter markets, culture was also a particular issue as firms were unsure of how businesses operate when trying to set-up trade links.
Two fifths of firms said they believed Brexit would hinder their efforts to export too, although 35% said it will make no difference to their activity.
Losing out on potential revenue streams could place small businesses under financial strain, especially those that operate on very fine margins.
A range of alternative finance options do exist though for those in difficulty who may wish to expand or consolidate their position.
UK exports have grown since 2008, jumping from $473 billion to $486 billion, but this is not in line with the global average.
By Phil Smith