Small UK exporters are more likely to target markets outside of Europe than focus on the single market once Brexit becomes a reality, according to new research.
A new report from investment management firm Albion Ventures found that over one in five small business owners planned to do more trade with countries outside of the EU in the next two years than within the Eurozone.
Just 16 per cent of respondents claimed the single market was the priority, while three-quarters of small exporters acknowledged the importance of new markets in light of Brexit.
Small manufacturing businesses and tech startups were among the most enthusiastic over new exporting opportunities, with around three-quarters of owners in both sectors expressing an appetite for global markets.
Commenting on the findings, Patrick Reeve, a managing partner at Albion Ventures, said the targeting of new markets was “good news” for smaller firms.
“Given the uncertainty of our long-term trading relationship with the single market, policymakers will be pleased that small businesses are increasingly looking beyond the Eurozone for new overseas growth opportunities,” he said in a statement.
Reeve added that challenges remained for owners in accessing the right expertise, staff and “regulatory know-how” needed to tap in to new markets.
“This is where fast-growth firms can benefit from partnering with an experienced equity investor, which can provide valuable hands-on support. For businesses that get it right, conquering new markets can have a transformational impact.”
In preparation for new export opportunities, over half of small business owners were in the process of developing new products or services to target overseas markets, while 38 per cent said they were investing in their online offering.
A recent British Chambers of Commerce (BCC) and DHL Express study suggested that capitalising on the opportunities in ecommerce could be the key to international export success for small UK firms.
“The rise of ecommerce, coupled with higher overseas demand following the fall in the value of the pound, is a real recipe for export success at the moment,” DHL Express UK CEO Ian Wilson said.
Small business owners in London were found to be most likely to embrace new markets, with 68 per cent making preparations for export growth. Added support could be needed for small firms in Wales and the South West of England, where just 47 per cent signalled intentions to break into new markets.
High street lender HSBC has previously called for banks and large companies to share “best practice” with smaller firms to improve Britain’s exports.
A report from the bank found that a limited understanding of foreign markets restricted opportunities.
HSBC’s UK head of global trade, Mark Emmerson, said that “collaboration was a necessity”.
“We are all united by a shared goal – to ensure British exports flourish – so it’s time to work together and step up our exporting game,” he said in a statement.
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