Lack of awareness and red tape hampering exports
Almost a quarter of small businesses are exporting their goods and services, but their efforts are being hindered by excessive bureaucracy and a lack of awareness of the support open to them, a new report has claimed.
According to the Federation of Small Businesses (FSB), a third of small firms that export believe that red tape is one of their main challenges.
Almost a quarter (23 per cent) of FSB members surveyed currently export products and services. The biggest obstacles encountered include red tape and bureaucracy (32 per cent), worries over payment (25 per cent) and difficulty in finding customers (23 per cent).
Fluctuating exchange rates (48 per cent) present the most difficult barrier.
FSB research in 2009 indicated that only 10 per cent of annual sales from small businesses went to countries outside the UK, but recent data shows that almost a quarter of small businesses currently export and that there is good potential for further growth.
Of those businesses that sell abroad, almost two thirds (59 per cent) export manufactured goods and 42 per cent services. Most firms (87 per cent) export to Europe, followed by the US (45 per cent) and Canada (25 per cent).
The FSB wants to see better promotion of the support that is available to firms that wish to trade overseas in order to encourage more to export.
Specifically, the FSB put forward the case for a series of measures.
These include more effective publicity for the help offered through UKTI, particularly the Passport to Export Scheme which helps businesses to export for the first time, and an information campaign on behalf of the benefits of the Services Directive which came into force in 2009.
There should also be a trade credit scheme for small businesses, the FSB said, and closer co-operation between the Ministry of Defence and business groups on the opportunities available in the defence industry.
Mike Cherry, the FSB’s policy chairman, commented: “With the UK economy in fragile recovery, a number of well targeted initiatives could be just the ticket that small business exporters and government are looking for to help the private sector led recovery.
“Manufacturing and defence are two sectors which offer big opportunities for small firms to export, but more effectively targeted information on the support that is already available is vital if small businesses are to be successful.
“The Services Directive offers huge potential in breaking down barriers to the single market, yet no small businesses surveyed were aware of it. With effective communication small firms can make more of this legislation and the opportunities it offers.”