Exports could provide 50% of SME revenue by 2019

Small and medium-sized businesses in the UK believe that half of their revenue will come from export sales within five years.


The study from Economist Intelligence Unit, carried out on behalf of DHL Express, showcases how exporting to foreign parts is expected to increase in importance in the coming years.


International trade could be vital to the long-term prosperity of these smaller companies, but a number of issues could complicate the situation.


The report noted political instability, cultural factors and inadequate infrastructures as possible barriers to exporting which could outweigh growth potential.


Understanding a target market was listed as a vital factor by 84% of the business owners questioned, with understanding language also vital.


This explains why many SMEs to date have entered markets that are similar to their own, as doing so makes it easier to integrate themselves into those markets.


BRICM (Brazil, Russia, India, China and Mexico) SMEs are better placed in other developing markets due to their ability to adapt, the study states.


Identifying areas where costs are lower or perhaps where there are fewer competitors can result in rapid growth and enhanced revenue.


In order to achieve growth, SMEs may need to review their approaches to how they view emerging markets and to develop new strategies to fully take advantage.


Smaller businesses that do not alter their processes to take advantage of export potential could face falling sales and difficult financial situations.


If immediate solutions are not obvious in such instances, seeking the advice of insolvency practitioners is advised as answers may then be forthcoming.


As far as infrastructure is concerned in potential export locations, SMEs are encouraged to research thoroughly to ensure that any costs do not outweigh the benefits.


Managing these costs will be an essential part of making entry into a new market a success and could ultimately influence whether choosing to export there was a wise choice or not.


By Phil Smith


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