It’s all change for UK SMEs as they gear up for a future of international trade post-Brexit. A new report shows that more payments are starting to flow outside of the European Union, and that 25% of small and medium businesses in the UK are planning to export to different countries in the next quarter.
Figures show that businesses in the UK are coming to terms with the Brexit uncertainty that has predominated since the referendum in June 2016 by developing new trading partners outside of the EU.
Relevant data was published in the Global Trade Barometer from World First and showed that around 30% of SMEs are feeling positive about their potential for international growth. This is up 5% from confidence levels reported in Q4 2017, when figures measured an all-time low across the board.
Business booming
For small and medium businesses already trading internationally, the picture is even more positive. Business is booming, and the average SME made overseas transfers of almost £50,000 in the first quarter of 2018 due to international trade. This is also an increase of 5% on Q4 2017, and the second highest number recorded by the barometer in more than two years.
Exporting and importing to countries outside of the European Union has stayed steady throughout Q1 of this year. This is particularly relevant for trade with the United States and China. Out of the ten markets that saw the biggest payment growth from UK SMEs in Q1, seven are not in the EU. They include Norway, Morocco, Turkey, Russia, Singapore, the UAE and Indonesia.
More support needed
Thwarting the long running negative headlines and growth projections, many small businesses are starting to seize promising global trade opportunities. This more confident outlook has undoubtedly increased, but around 46% of respondents still feel that they need more external support to encourage more exporting.
Around one in five SMEs (18%) want support specifically to seek out international partners, and 17% want the government to help them trade more overseas. As well as asking for more support, SMEs are also looking at different ways to do business to achieve their international trade goals.
Managing finances
Around one in ten SMEs are considering changing from their traditional bank towards a fintech provider for their foreign exchange transfer needs. Some have already made the switch, while just one in five are not planning to find a new way to sort their international finances.
The government has been heavily promoting the benefits of trading with new partners outside of the EU over the last year, but this survey shows clearly that more support is needed for the UK’s small businesses. SMEs will be exporting pioneers after Brexit and we hope that the government and wider industry will do as much as possible to support this.
Preparing for international risk
SMEs in the UK are also diversifying their business in new and emerging markets. Countries in Africa, the Middle East and Eastern Europe in particular are experiencing large increases in payments from the UK.
Looking beyond Brexit is leading to a new-found optimism for UK SMEs as they refuse to steer away from international trade. By scouring for deals in emerging markets, businesses are showing how keen they are to keep pushing for growth by global expansion. While 2017 was 12 months of relative stagnation for small businesses in the UK, it looks like the rest of 2018 could be the year of ambitious expansion and success.
For information and advice on setting up your small business, contact the team at Turner Little.
About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.
