Small firms are embracing exporting - but still put off by “red tape”

Growth strategies involving international expansion are widely covered in the existing business studies specifications, albeit the textbooks often assume that international expansion is mainly the preserve of larger businesses. So a new report from the Federation of Small Businesses on export activities in the SME sector provides an encouraging insight into how international markets can benefit small firms.

The report from the FSB shows that a quarter of small businesses in the UK now export. However, they don’t find this strategy easy and complain of red tape (government legislation) and the risks and uncertainties caused by currency fluctuations.

Almost a quarter (23%) of the 1,600 FSB members surveyed currently export products and services but are put off by red tape and bureaucracy (32%), fluctuating exchange rates (48%), worries they might not get paid (25%) and difficulty in finding customers (23%).

The Government has hailed exporting as a potential driver for economic growth over the next few years. FSB research in 2009 indicated that only 10 per cent of annual sales from small businesses went to countries outside the UK, but recent research shows that almost 23 per cent of small businesses currently export and there is good potential for further growth.

Of those businesses that export, almost two thirds (59%) export manufactured goods and 42 per cent services. Most firms (87%) currently export to Europe, followed by the US (45%) and Canada (25%).

The FSB is calling for more targeted promotion of the support available to encourage more businesses to export. The FSB believes that more effective and targeted promotion of the support available would benefit all small firms, especially those doing a little and wanting to do more. In fact, businesses have said that this would be more beneficial than tax breaks and added private sector finance.

The full report can be downloaded here