In today’s digital world, it’s never been easier for small businesses to discover the possibilities of international trade. However, not all SMBs are fully exploring the potential of the global market, and they’re missing out on the benefits that it can bring. With this in mind, we conducted some research with YouGov, surveying 2,000 small businesses from all across the UK to get their thoughts on international trade and what we can learn from it. Here’s what we found.
The future looks bright
Six out of ten UK SMBs anticipate doing business internationally by 2016 — a 20% increase on the number that are currently selling or sourcing products and services abroad. A fifth (20%) expect to increase the number of countries they trade with and over a quarter (28%) predict they will see more revenue from international sales by 2016.
Our poll also revealed that those that do trade abroad understand its significance – nearly three quarters (72%) said that international trade will be “important” and over two-fifths (42%) said that it would be “very important” to their business in 2016.
Technology continues to enable
Technology continues to make international business simpler and cheaper— of those currently selling abroad (42%), almost one in two sell through the business’ own websites (45%), and a growing number (14%) are using online marketplaces. Whilst unsurprisingly Europe and North America continue to dominate international trading relationships, it was interesting to see that at least one in ten UK SMBs are now doing business outside of these markets.
The stats also revealed a clear age divide amongst SMB managers in terms of their outlook on global trade. Younger SMB managers (aged 25-44) are 23% more likely to project revenue growth and 60% more likely to project an expansion in the number of countries they trade with.
Younger managers are also more likely to use technology to foster international relationships —40% of those under 45 use video conferencing to communicate with business partners, compared to 29% of those aged 45 and over. Social networks are more common amongst younger SMB managers too—over a quarter (26%) of those under 45 use social media to communicate with business partners, compared to under a fifth (19%) of those aged 45 and over.
Over half of the IT and telecoms industry (54%) use online video conferencing, which we found to be higher than any other industry surveyed. Interestingly, the IT and telecoms industry is also the most optimistic about future international trade – nearly four in ten (36%) expect to increase revenues from international sales, and over a third (34%) predict an increase in the number of countries they trade with by 2016 – suggesting a direct link between embracing technology and increased revenue.
When it comes to the use of social networks, SMBs in the marketing sector are the biggest adopters with nearly a third (31%) using them as a way to communicate with international partners.
What are the barriers and how can we help?
The data also revealed that international trade doesn’t have a one-size-fits-all approach, and its benefits aren’t felt by all that we spoke to. The two biggest reasons for not trading internationally were that products or services weren’t relevant to other countries (19%) and those surveyed felt that there was more opportunity for growth locally (15%).
From talking to our own customers we found that knowing where to trade was also a barrier to entering the global market. We’re also supporting Enterprise Nation’s Go Global Mission this month— a two-day trip from the UK to New York for 60 UK small business owners, giving them the opportunity to meet with a selection of New York’s hottest startups, brands and entrepreneurs.
Simon Bullingham, CEO of Journey and Citrix customer, is joining us on the mission. He said,
“Expanding our international footprint is crucial to our business as we specialise in delivering digital consultancy to hospitality and tourism clients. We know we have the technologies in place to work with international clients and partners, but the real challenge, as a small business owner, is knowing where to go to access the right advice and support to start exploring new markets. We’re excited to be joining this unique trade mission to New York to gain exposure to the right expertise so that we can make decisions faster and accelerate the international growth of our business.”
Another great initiative for SMBs is the Government Growth Vouchers scheme – a £30 million plan to give small businesses in England subsidised advice from thousands of experts on key topics. You can read about how to get involved and how this could benefit your business in our blog post on the topic.
Is your business making international trade its mission over the next few years? Join the discussion with the #goglobal hashtag on Twitter!
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,019 senior decision makers from SMEs (businesses with less than 250 employees). Fieldwork was undertaken between 18th – 27th August 2014. The survey was carried out online. The figures have been weighted and are representative of GB business size.