Recession generation SMEs seize international trade opportunities earlier
- Almost two thirds (65%) of currently exporting SMEs started between 2007 and 2014 began exporting within their first year1
- Pre-1990 businesses utilise exporting as a tool of growth much later in business cycle but 42% wish they’d done it sooner
Research1 from Barclays has shown that small UK businesses are starting to export far earlier than before. Of those SMEs currently exporting, nearly two thirds (65%) of those set up during the period of 2007 and 2014 started trading overseas within their first year of business. This compares to just 34% of businesses set up before 2007 that had traded abroad within their first year.
The research found that growth was the top driver to export for small businesses set up between 2007 and 2014 (43%) alongside a demand for their service overseas (42%). The research demonstrated the rise in international appetite for UK products and services in the last seven years, with young businesses seeing overseas demand up 7% more than SMEs starting in the period of 1997-2006. Another factor in the decision to export was the declining UK economy2, named by 15% of SMEs set up between 2007 and 2014. For pre-recession businesses (set up before 2007) this number fell to 12%. Looking at international markets earlier was also attributed to growth limits- over a quarter (26%) of SMEs set up in the last seven years stated they had reached their UK growth ceiling within just one year.
A substantial 42% of SMEs formed before 1990 and currently exporting say they wish they had started exporting sooner. However, despite missing out on earlier opportunities to export, ambition for future growth is highest for businesses established pre-recession (1997-2006) attributing the greatest proportion (16%) of their predicted growth in the coming year to exporting.
Steve Childs, Head of International for SMEs at Barclays commented: “The case for exporting is strong given the growth potential it offers. It’s therefore interesting that the research shows a shift in the time when small business started their export journey, depending on the period the business was formed and against the backdrop of UK economic cycles. It shows that ‘younger’ businesses whose outlook on UK economy may have been shaken by the events following 2007 and 2008 - have set their sights on overseas horizons right from the start and making a success of this. Conversely the findings reveal businesses started before this time have taken a slightly more measured and cautious approach to exporting, though there is some regret from those that wish they’d grabbed the bull by the horns a little earlier.’’
The research also revealed that ‘younger SMEs’ have benefitted from getting to grips with social media. A quarter (24%) of businesses formed between 2007 and 2014 and already exporting say that the emergence of social media such as Twitter, Facebook and LinkedIn has helped sales overseas, while this figure was much lower for all SMEs established before 2007 (8%).
Barclays has recently launched local growth clinics to help small businesses through networking and events programmes, aimed at helping UK SMEs to flourish and grow.Notes to Editors:
1 2014 Research conducted by Opinium Research on behalf of Barclays, 519 online interviews with UK SMEs defined as £0-5mn turnover, between 27th June-4th July 2014
Barclays is an international financial services provider engaged in personal banking, credit cards, corporate and investment banking and wealth management with an extensive presence in Europe, the Americas, Africa and Asia. Barclays’ purpose is to help people achieve their ambitions – in the right way.
With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs approximately 135,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide.
For further information about Barclays, please visit our website www.barclays.com.
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