FedEx Express – the largest express courier in the world – recently released its Great British Export Report, which provides an insight into export trends among SMEs in the UK. The audit gathered the views of 1,000 firms to establish their current cross-border activities and plans for the future.
Many UK SMEs not ‘internationally active’
Of the 1,000 SMEs assessed, it was found that just one third are currently ‘internationally active’, while 35 per cent believe that extending into new markets will be key to their success over the next 12 months. Although many have the ambition, the findings showed that over half (51.9 per cent) believed they would need support to achieve their international goals, and that a lack of technical knowledge is holding them back.
FedEx rightly notes that as the UK economy continues to strengthen after climbing from recession, exporting can drive growth forward – for both the firms who take the leap and the economy as a whole. The Great British Export Report seeks to highlight the support available and place “the thinking, plans and priorities of UK SMEs back on the national agenda”.
Developed markets today’s focus
Of all EU nations, Britain recorded the strongest export growth in 2013, and FedEx’s findings show that developed countries are the current focus for UK businesses that sell outside of Europe. The US was the leading location with 44 per cent claiming the territory as their main buyer, followed by Australia (30 per cent), New Zealand (20 per cent) and Canada (20 per cent).
Although developed nations are today’s priority, many see emerging nations as having the most potential to grow into. The US was highlighted by 23 per cent of surveyed firms as an area with great potential, but it was the sole developed region in the top five locations earmarked by UK SMEs for the future. China (11 per cent), the Middle East (9 per cent), South Africa (4 per cent) and India (4 per cent) were the four other most frequently cited areas.
Take steps to protect when looking abroad
The benefits of expanding beyond domestic borders are clear, but a reluctance still remains. For those who do make the move into new markets, there are steps they can take to protect their interests, and it starts with due diligence.
International risk monitoring allows firms to observe buyers and vendors in international territories to help them make informed decisions should any activities threaten their supply chain. Before entering into a contract with any firm and throughout the relationship, it would also be prudent to obtain a credit report to fully understand their payment behaviour to mitigate any credit risk.
As the FedEx Great British Export Report shows, looking internationally for growth has its risks and its rewards for SMEs. Through appropriate planning and risk management, the challenges faced can be overcome as growth is obtained.
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