Is exporting key to rapid SME growth?
Small businesses who export grow at a faster rate than those who do not, a new study from Barclays has claimed.
It highlights the importance of branching out to foreign markets, as SME exporters revealed profit growth of 17% during the past year.
That compares to all SMEs who reported average profit increases of 14% and to non-exporters, where profit growth was only 11%.
Some 27% of exporting businesses said their profits were up by 40% or more, while Barclays defined ‘substantial profit’ as being 21% or more.
More than a third of companies who had turned to exporting said they did so when they hit growth ceilings within the UK, adding that exporting abroad was vital for continued growth.
Further growth is expected too, with 65% of companies quizzed saying they expect their turnover to increase in the next 12 months.
Meanwhile, one in ten companies predicted “substantial growth” of 21% or more, suggesting that many businesses are aware of their options overseas.
Medium-sized firms were deemed to be most optimistic about growth, with 84% predicting that both revenue and profit will increase during the next financial year.
For businesses who cannot find growth opportunities, a change of approach may be required in order to ensure a company can remain profitable.
In such instances, seeking business turnaround advice may prevent more profound measures from being required in the long-term.
Acting early is a necessity in any situation where it appears business is stagnating, and moving to export markets is just one of many possible solutions.
With confidence returning to the SME market, levels of optimism are at higher levels and levels of support for international trade are also growing.
This requires businesses to look to the future and to ensure their needs are met – vital for creating a solid financial base from which to work.
Although not all businesses may wish to grow, it is recommended that SMEs consider their options in order to maximise opportunities.
By Phil Smith