Yorkshire SMEs hit domestic growth ceiling after four years – Barclays
BARCLAYS is calling on Yorkshire SMEs to take a more global outlook and consider the growth opportunities that can come from exporting.
Research from Barclays reveals that on average, businesses in Yorkshire are four years old when they realise they can no longer drive their desired growth from the UK market alone and hit a domestic growth ceiling.
Barclays said 38% of exporting SMEs in Yorkshire say they wish they’d started sooner, 41% of SMEs in Yorkshire give psychological barriers as reason for not starting to export sooner and 89% of SMEs in the region said they found the experience to be as they hoped, or even easier than expected.
The research claims that on average, across the UK, this tipping point – the limit at which businesses realised they could no longer achieve desired business growth by trading only in the UK – was clear across all sectors, but at different times.
Research shows that telecoms and internet, media and entertainment businesses hit their limit at only two years, whereas logistics and retail businesses reached it at three. Manufacturing businesses found they had more time before needing to look abroad for growth opportunities; hitting their limit at eight years.
Caroline Pullich, head of Barclays Business Bank for Yorkshire, said: “What strikes me about our research is how successful at exporting SMEs are. This is despite 58% of business in Yorkshire claiming to have ‘fallen into it’, or only looking at it ‘when an overseas customer got in touch’. With such high growth opportunities, imagine the possibilities that could come from taking a more proactive approach.
“We are committed to helping UK SMEs trade confidently across the globe and call on them today to think more internationally with their business plans.”
While the thought of taking a business overseas may seem daunting for some, the research, which surveyed 500 UK SMEs already exporting, provides encouragement for those yet to start.
Looking back on their experiences, 89% of SMEs already exporting in Yorkshire said they found the experience to be as they hoped, or even easier than expected. Nationwide, this was especially true for retail (92%) and utilities (94%) businesses.
Barclays said this could be in part because the majority now realise that a number of the factors that had held them back were psychological, rather than actual, barriers. In Yorkshire, 41% of those who said they wish they’d started exporting sooner said the reason they hadn’t done was because they either just ‘didn’t know where to start’, thought it would be ‘too complicated’, ‘didn’t think it would work’ or just ‘didn’t think to do it.’
Having overcome those psychological barriers, 38% of SMEs in the area now say they wish they’d started exporting sooner, according to the research. Nationwide, this is most evident in utilities, logistics and pharmaceutical businesses, where 75%, 61% and 83% of businesses respectively say they wish they’d started exporting earlier.
