South American trade boost for UK small businesses

Nearly twice as many UK small businesses are exporting to South America than they were five years ago, new figures show.

Just under one in five small businesses (19%) said they had exported to the continent this year, compared to 11% in 2011.

The move is despite slow economic growth in South America, which suggests many firms are keen to seize on opportunities for growth and expansion.

Brazil topped the list as an export destination, with 13% of UK businesses doing trade there, followed by Chile (8%), Argentina (7%) and Colombia (6%).

The profile of South America has been raised significantly thanks to two major sporting events since 2014 – the football World Cup in Brazil and this year’s Olympic Games in Rio.

Mike Cherry, the Chairman of the FSB (Federation of Small Businesses), suggested that the increase is also promising given the uncertainty surrounding Brexit.

While appetite for trade is a positive, businesses still need to proceed with caution given market conditions and the costs associated should exporting deals go wrong.

A total of £7 billion of goods were exported to South America last year but that represents a drop from 8.8 billion in 2013.

In order to succeed, the UK’s small businesses will need an adequate knowledge of regional markets and will need to push for sales in the right way.

Brazil is currently facing a recession, so small businesses must be careful not to over invest into a potentially unstable marketplace – a company may choose to have a contingency plan in place if they fear financial trouble should something go wrong.

The Government is trying to encourage Brazilian investors to join forces with British businesses and has noticed some success – 40 contracts relating to the Olympic Games worth in excess of £150 million for goods and services have already been won by UK firms.

The International Monetary Fund has suggested that the region will notice growth from 2017, so UK businesses could benefit from getting involved early.

By Phil Smith

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