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Seven in ten UK SMEs report barriers to exporting outside the UK PDF Print E-mail
Thursday, 07 July 2016
Across the nation seven in ten small and medium sized businesses (69%) reported coming up against hurdles when wishing to export outside the UK, according to new research from Hitachi Capital’s British Business Barometer.   

At a time when the biggest export market for the UK is Europe, if the button is pressed on article 50 it could potentially impact this territory. Currently exporting offers a significant earning potential for SME’s - the value of which totaled £44.9bn in the month of June for the UK alone, the fastest growth since February 2010*. However, with more than one in five SME’s (24%) reporting legislative difficulties in foreign countries as a barrier to exporting, it could affect the UK small business economy even further.

Within the sectors
Manufacturing: Almost two in five SMEs (37%) in manufacturing said that paperwork, including managing customs duties and documentation are restricting when exporting goods. More than one in four (27%) said that shipping and logistics caused barriers to exporting and over one in five (22%) that the lack of knowledge and experience caused difficulties for business exports.

Construction: A third of small and medium sized organisations (33%) do not see any barriers restricting the business when exporting. However with the current political situation following the fall out of the EU Referendum, one in five of SMEs in construction (20%) reported difficulties with foreign rules and regulations in other countries.

Agriculture: Lack of knowledge and experience has held back a third of SME’s in agriculture (33%). The same is also the case when it came to foreign legislation. More than one in four (26%) found that shipping and logistics caused the business restrictions when exporting.

Across the country
In the North, almost a third of small and medium companies (32%) said that paperwork is a barrier to exporting. More than a quarter (26%) experienced barriers with legislature from foreign countries.

A quarter of SME’s in London (25%) found restrictions with legislative difficulties in foreign countries, compared with 15% in the East.

In Wales, 29% of small organisations had difficulties through their company’s own lack of knowledge and experience, compared to a quarter of SMEs in Scotland (25%).

Additionally 31% of small and medium sized organisations in Wales reported that paperwork, including customs duties and documentation, caused export restrictions.

Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance commented: “Paperwork, lack of knowledge and legislation hindering business growth appears to be the biggest hurdles that small businesses face when exporting. It’s key that SMEs understand the rules and regulations of the country the business is exporting to and the Business Barometer has highlighted that this is something that 35% of SMEs feels holds them back - especially if it is a new process. With the uncertainties following the EU referendum, the topic of exporting will be high on everyone’s agenda. What is vital is that whatever the outcome of the exit negotiations, the visibility of these issues doesn’t reduce and the help to grow exports continues to develop. Exporting is important to the UK economy and despite the UK’s impending exit from the EU, overseas markets still represent an attractive option for many small firms. Emerging economies such as India, China and the Middle East all have potential to significantly expand the available market for SMEs.”

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