When Will you Hit Your Domestic Growth Ceiling?
In the early stages of setting up your business it’s likely that you focused on getting your product out to market and establishing your brand.
However, you may not have predicted what would happen once you had saturated the domestic market.
It’s at this point that international trading can turn your business from a start-up into an established SME.
Home or away?
New research from Barclays* shows that businesses, on average, are four years old when they realise they can no longer drive their desired growth from the UK market alone.
This growth ceiling was clear across all sectors and, interestingly, at different times. Telecoms, internet, media & 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.
More often than not it’s at this point that SMEs start looking into international trade to help boost their growth, but with a prepared approach early-on the results can be quite astonishing. Last year we found that almost a third (29 per cent) of small and medium sized enterprises (SMEs) had seen a positive impact on their bottom line within just six months of expanding into international markets.**
Physical or mental barriers?
Naturally, the thought of taking your business overseas can be daunting and there are overriding logistical questions that need to be asked – what country do I target? What happens with language barriers and currency conversion?
However, psychological barriers predominate – over half (52%) of SMEs we surveyed gave psychological barriers as the main reason for not exporting sooner stating that they just ‘didn’t know where to start’, thought it would be ‘too complicated’ or ‘didn’t think it could work’.
What is striking about the research is how successful SMEs are at exporting. This is despite 60% 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. Once they had overcome psychological barriers, just under half (47%) of SMEs now say that they wish they’d started exporting sooner and more than four in five (86%) of SMEs said they found the experience to be as they’d hoped or even easier than expected.
Now is the time to get exporting or, at the very least, to get creating an exporting strategy for your business. There are a number of services out there to help, whether it’s speaking to your local bank manager or contacting UK Trade and Investment directly – don’t wait, get going and get global.
Barclays unique proposition, “Business Abroad”, provides the tools and know-how that businesses need to instantly start trading internationally with confidence. It offers free access to expert guidance, advice, workshops and tools, as well as discounts on international products and services. It is available to all businesses by visiting www.barclays.co.uk/InternationalBanking/BarclaysBusinessAbroad or speaking to a Barclays Business Manager.
In addition to launching Barclays “Business Abroad”, Barclays is also working with UK Trade and Investment to help small businesses trade internationally – from securing their first international customer to setting up an overseas operation. They run free International Trading Clinics across the UK, aimed at all businesses who would like advice and guidance on trading overseas. To find out more please visit: www.barclays.co.uk/businesshub or phone 0845 124 6502 to book a free place.
*Based on Barclays Research ‘Time To Export’ October 2013
**Based on Barclays Research ‘Export To Expand’ October 2012