North SMEs are reluctant to expand overseas

SMEs are reluctant to expand overseas, with only a quarter planning to increase their international sales over the next year.

Tom White/PA Wire The Tyne Bridge and The Sage Gateshead
North East SMEs are reluctant to expand overseas

SMEs are reluctant to expand overseas, with only a quarter planning to increase their international sales over the next year, according to the latest survey by Baker Tilly. In the North East and Yorkshire, the figure was just one in five.

The survey of 750 UK SMEs found that the main reason holding businesses back is perceived cost, with 90% of respondents indicating that international expansion would be too expensive, while 70% said they feared a loss of control.

SMEs in the North East and Yorkshire agreed that cost was the major reason, but a lack of knowledge was also a factor cited by 70% of respondents.

The survey showed a marked difference between London and the rest of the UK. While almost half (44%) of London-based SMEs were active internationally, in most other regions, the equivalent figure was generally between 20-30%, ranging from 20% in Wales and Northern Ireland to 31% in Yorkshire and the North East.

Between 60-70% of manufacturing, food and drink, and energy and natural resources companies reported that they have international or export operations, and over 50% of manufacturing and energy and natural resources businesses said they plan to do even more overseas next year.

Neil Sevitt of Baker Tilly said: “Coming out of a tough recession, it’s understandable that some SMEs are hesitant about expanding internationally. It’s not for the faint hearted, and there can be pitfalls for the inexperienced or unprepared, but companies would do well to find out more about export opportunities through the UKTI, and consider other options such as cross-border M&A.

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