FSB suggest growing number of businesses prepared to export
New research suggests that small businesses are more prepared to engage in export activities than at any point in the past.
The quarterly business index from the Federation of Small Businesses discovered that a net balance of 24% of its members expect to see an increase in exports during the next three months.
It highlights the significant developments seen in the economy of late and suggests that businesses are feeling more comfortable with the idea of exporting.
FSB chief John Allan suggested that small businesses will play an important role in any attempts to meet government targets of 100,000 new exporters by 2020.
Those targets also want to double the value of exports in the same time-frame, suggesting significant levels of growth are anticipated during the next six years.
Overcoming barriers to exporting
A greater focus from UK Trade and Investment – the government department responsible for boosting exports – on small businesses is required to drive this growth, according to the FSB.
Barriers to exporting come in several forms, with fluctuating exchange rates the most common issue according to 35% of businesses.
Meanwhile, 24% said finding customers was preventing exportation, while 23% blamed a lack of working capital.
The restructuring of some businesses towards more export-friendly models could occur as the recovery takes hold, in order to maximise potential and reduce unnecessary expenditure.
Looking to markets all over the globe
“The UK’s export strategy must focus on matching a company’s export potential to the right overseas market,” said Mr. Allen.
“The majority of our members still export to the eurozone but are increasingly looking to other dynamic markets such as China for opportunities.”
Manufacturers were deemed as those most likely to export, while wholesalers and research/development companies were also high on the list of sectors with potential.
UKTI are working to drive exports, while financial institutions can now use export credit notes guaranteed by the British government’s trade promotions agency as collateral at the Bank of England.
This measure should stand to cheapen finance for firms looking to export, according to Chancellor George Osborne.
By Phil Smith