Micro and small firms are planning for big futures, with 58 per cent intending on entering new markets in the next two years.
Despite recent figures from the CBI which found output among small and medium-sized manufacturers fell in the three months to October, with both domestic and export orders dropping, new research from Albion Ventures suggests the manufacturing sector hopes to lead the way in exporting.
Three-quarters of manufacturing companies intend to enter new markets, which was the highest of any sector. It was also top for expansion within the EU at 28 per cent. Firms in media, marketing and advertising and IT and telecoms were second and third with 68 and 56 per cent of businesses planning to branch out internationally in the near future.
Some 34 per cent of small and medium-sized firms will be looking to break into new markets overseas, with nearly a fifth looking outside of the EU to do so. A further 15 per cent of small businesses plan to grow through launching new products and improving their online services.
This is seen as important for those looking to capitalise on ecommerce. More than half of Chinese buyers, who are responsible for a fifth of British exports according to a PayPal study, said they returned to a website they had used previously.
PayPal’s UK MD Cameron McLean said businesses should concentrate on making use of the “vast, borderless potential of mobile”.
There was still room for smaller firms in particular to be greater supported in growth ambitions however. The third Albion Growth Report, exploring the factors that can create and impede growth for over 1,000 SMEs, found that medium-sized companies were more likely to be looking to expand into new markets (77 per cent) than small businesses (53 per cent).
Problems cited by businesses trying to enter new markets included lack of expertise, too many regulatory obstacles, strong competition and lack of demand.
Patrick Reeve, managing partner at Albion Ventures, said: “The search for new markets among small businesses is gathering pace with much of the effort focused outside the UK. Given the EU’s continuing economic travails, it’s of little surprise that other overseas markets are proving more popular.”
He thinks that too often small firms “lack the necessary expertise to overcome established competitors”. Reeve suggested external equity investors as one route to finding support as for those companies which manage to get it right “conquering new markets can have a transformational effect”.
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