Findings from a new report show that SMEs are actively targeting overseas trade outside the EU.
The report from Albion Ventures, one of the UK’s largest independent venture capital investors, found that the majority (55%) of small to medium-sized firms are planning to enter new markets in the next two years and of these, more are planning to look beyond the Eurozone for new trade than within it.
The report concluded that despite being the UK’s largest overseas trading partner, over one in five (21%) SMEs are planning to do more trade with countries outside the EU over the next two years compared to 16% who are targeting the single market.
The figures also show that the appetite amongst SMEs to target new overseas markets since the Brexit vote has grown from 34% in 2015 to 37%, significantly more than those who are focused on expanding domestically (29%). What’s more, a further 13% small businesses plan to grow through launching new products and improving their online services.
It also appears that medium-sized companies are more likely to be looking to expand into new markets (76%) than small businesses (50%).
Looking at the figures in terms of sector, more than three-quarters (79%) of transportation firms are planning to enter new markets, the highest of any sector. Manufacturing businesses (75%) and the tech sector (72%) were second and third respectively. The manufacturing sector is clearly the most positive about continuing relationships in Europe, with 34% looking to enter new markets in the EU.
Managing Partner at Albion Ventures Patrick Reeve said: “The good news is that most SMEs plan to grow by tapping into new markets. Given the uncertainty of our long-term trading relationship with the single market, policymakers will be pleased that small businesses are increasingly looking beyond the Eurozone for new overseas growth opportunities.
“This strategy makes sense in theory but many CEOs will know that it’s tough to execute in practice as they often lack the right staff, expertise and regulatory know-how. This is where fast-growth firms can benefit from partnering with an experienced equity investor, which can provide valuable hands-on support. For businesses that get it right, conquering new markets can have a transformational impact.”