Lack of export knowledge holding back half of SMEs

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A lack of experience in overseas trading is holding back small businesses looking for growth, research has found.

A study of small and medium-sized enterprises (SMEs) by business network BTube found 49 per cent said expertise in export was the biggest barrier to trading internationally.

Concerns about digital skills were also raised, with almost two thirds (63 per cent) saying they did not have the knowledge to create a successful online operation.

The biggest challenge facing SMEs in the coming year is finding new customers for growth, according to 35 per cent of respondents.

However, SMEs often failed to adapt their business for foreign markets. This included not understanding local business practice, such as using Skype rather than email to communicate with Chinese firms or not meeting the requirement of multiple personal visits before doing business in India.

Hire the right staff is one barrier, the survey found, with 22 per cent saying recruitment and retention is the biggest challenge for 2015.

Kelly Hoppen, interior design entrepreneur and star of Dragons’ Den, said: “We operate in a globalised market, but that doesn’t mean all markets are the same.

“Businesses need to take the time to understand the nuances of foreign markets, if they wish to take advantage of the fantastic opportunities to tap into new sources of production, distribution and sales.”

The Federation of Small Businesses (FSB) said that while small businesses can struggle with the “intricacies” of foreign markets, the Government has taken a number of steps to support those entering export.

Gordon Millward, South and East Yorkshire chairman of he FSB said it welcomes the Government’s plans to award five-year contracts with providers to deliver export support to businesses.

Enterprise Growth Solutions, a partnership of Exemplas and Reed Solutions, for Yorkshire and the Humber, is one of the providers involved.

The partnership has been chosen by UK Trade and Investment (UKTI) and the length of the contracts will underline the long-term potential to increase the number of businesses exporting aborad, Mr Millward said.

“The lengths of the contracts also mean that English companies will be eligible to bid for up to £100m in additional export support through the European Structural and Investment Funds,” he added.

“UK Trade and Investment helped a total of 47,960 businesses in 2013 to 2014 to export for the first time or find new markets through its extensive network of specialists in the UK and in British embassies around the world, and we welcome the fact that it will now be targeting its expertise on smaller businesses.”

A UKTI spokeswoman said exporting can deliver a “quantum leap” to all UK companies regardless of size.

“Selling abroad is the surest path to successful, sustainable, long-term growth, and companies that export become more productive, more innovative and more efficient than those that don’t,” she said.

Almost nine out of 10 (86 per cent) of UKTI clients said exporting led to growth that would not have been achievable otherwise, she added.