Experian Has Revealed UK SMEs Are Missing Out On The Lucrative Export Market

Research from global information service firm Experian has revealed some SMEs are not doing enough to take advantage of lucrative export contracts.

Experts from the firm analysed more than 40,000 businesses that currently export so they could build a profile of the prototypical company that manages to make the most of foreign demand for British products.

Key characteristics of opportunistic SMEs that excelled in their export operations were that they had more than 20 employees, multiple locations, geographical bases throughout the UK, a good credit rating and an auditing or accounting system.

It was also found that Aberdeen has the highest proportion of businesses that have these positive characteristics, mainly due to the Scottish city's access to a lucrative oil and gas industry, which attracts pan-European interest.

In terms of regional attainment, London had three of the top ten areas capable of making the most of the global market. Glasgow, Edinburgh, Cambridge, Falkirk, Dundee and Kirkaldy also rounded out the top of the chart.

Experian also studied which specific industries maintain an international client base and it was found 8.8 per cent of electrical equipment manufacturers currently export their products, although this is somewhat disappointing considering 44.5 per cent have "high export potential".

Food manufacturers also fared well and 8.6 per cent sell their goods abroad, but once again, this paled in comparison to the 32.1 per cent that have the necessary utilities to make use of foreign buyers' interest.

Max Firth, UK managing director for Experian's Business Information Services division, said: "Trading internationally contributes significantly to business and economic growth for specific regions and industries across the UK.

"When you consider that of the known exporting population, the average amount of turnover attributed to exporting is approximately 50 per cent, the companies identified could potentially double their income capacity by exporting."

Helping SMEs to increase their export potential remains one of the greatest current government priorities and the coalition has had reasonable success in closing the trade gap.

Expert Opinion

It is vitally important that SMEs exploit growth opportunities not just domestically but in international markets also. Getting a foothold in a different country can be challenging, but the benefits can be extremely rewarding <br/> <br/>“There are a number of options available to a business that is looking to expand overseas, ranging from exporting directly into a country to setting up a licensing agreement with a company which has an international sales network already established. Whichever route chosen, it is essential that a business seeks experienced professional advice to ensure that they not only make the most of the opportunities that exist, but also ensure they are fully protected.” <br/> Steven Beahan - Partner