Despite uncertainty surrounding the terms of Brexit, small British businesses are increasingly optimistic about international trade – especially with Europe. In fact, the majority expect to increase overseas sales in the next year, according to data released today by international payments company, OFX.
OFX’s annual survey of 500 small business owners and senior managers found that 62% feel confident about doing business outside the UK. In addition, the majority of small businesses (46%) said that Brexit-related uncertainty around the UK’s future trade deals and customs arrangements had no effect on their appetite for international trade, with only 15% reporting that it had reduced their interest.
Surprisingly, with just nine months until Brexit and continued uncertainty around its outcome, Western Europe became SME respondents’ favoured export market this year, with the USA falling dramatically in popularity.
It was a completely different story last year, as small businesses looking abroad for growth singled out the USA as the most attractive market for exports (62%), with Western Europe lagging far behind in popularity at just 20%.
Regional outlook for Wales
Though the overall findings were positive, this year’s survey uncovered a regional disparity in small business’ confidence around international trade. SMEs in Wales are less confident, with 58% of respondents in Wales confident about doing business overseas, compared to 62% of all SMEs.
The survey results also show a regional disparity as to whether respondents believe enough support is available to small businesses trading internationally.
In Wales, 50% of the SMEs who responded say there isn’t enough support to help them trade overseas.
Whether or not there is a lack of support or an awareness issue is something that is widely contested.
Joshua Williams, co-director of Welsh menswear company Tails and the Unexpected, sells British-made clothes online from the company’s base in Penarth, near Cardiff. He says:
“My father founded our business almost forty years ago as a stall in a Cardiff antique market. Today, we make almost all our sales online, with more than half our customers based outside the UK. Local heritage and family history are both central to our brand, and we’re lucky that the internet has made it possible to grow our business abroad without losing our Welsh roots. We have sometimes had to travel for specialist guidance, but it’s a minor inconvenience when compared to the huge advantages and quality of life we gain by running our business in Penarth.”
However, support and advice to help businesses trade internationally is available through organisations such as the Institute of Directors (IoD), South Wales Chamber of Commerce and the Wales Exporters Association. Even if they can’t support you directly, they have close relationships with organisations including the Welsh Government who can.
Robert Lloyd Griffiths, Director of the Institute of Directors in Wales said:
“There are various options of financial support for Welsh SMEs and all businesses to invest at home as well as abroad, but one option won’t be the right option for all.
“In my experience, it is worth those seeking access to funding thoroughly researching various options. I can’t emphasise highly enough the importance of being prepared to put in the effort in order to win support.
“Often times, this is a 2-way process with businesses needing to be lending ready – this was a clear outcome of the Access to Finance Review – a report that I conducted for Welsh Government a few years back. SMEs vying for financial support should consider how much of their own funds they are investing and how lending ready their business and marketing plans are – effort must be made by both parties for a successful partnership to progress.”
Commenting on the findings, Heather Myers, Director of South Wales Chamber of Commerce added:
“There is actually a lot of support out there for businesses that want to export, provided by both the public and private sector. The challenge that many businesses that contact the Chamber of Commerce have is finding out who is the right person to speak to.
“The Chamber of Commerce certifies certificates of origin and we run courses on technical elements of exporting; export documentation and methods of payment for example. But we also know the people who can help exporters such as banks, foreign exchange providers, translators and people who organise trade missions.
“We make sure that our members connect to the right people which is why the vast majority tell us that they have adequate support. But we want the support available to Welsh exporters to be excellent which is why we’re working with organisations such as the Welsh Government, Department for International Trade, Business Wales and the Wales Exporters Association to improve the service across the board.
“To contact the South Wales Chamber of Commerce for more information, please phone 01633 254041 or e-mail [email protected]“