Small businesses step up plans for overseas expansion
Across nine UK regions, more than one in five small business owners (22%) are looking to expand into new markets overseas in order to achieve business growth.
The latest findings from the quarterly Business Barometer research by Hitachi Capital Business Finance comes at a time when the country is gearing up for the Brexit deadline. Set against warnings of an economic slowdown, the small business community is pushing forward with positive new initiatives over the next two months in order to secure growth.
Overall, 64% of small business owners polled said they were considering new initiatives in the three months to 30 September to help boost their growth prospects – and businesses working on such initiatives were significantly more likely to have an upbeat business outlook for the three-month period. Sectors where small businesses were most likely to be working on specific new plans included real estate (74%), IT/telecoms (71%) and manufacturing (70%). More seasonal businesses such as agriculture (60%), construction (59%) and hospitality (45%) were among the least likely to be working on new initiatives to achieve growth.
Percentage considering new initiatives to achieve growth
– by current business outlook (for the three month period to September)
Significant growth
89%
Modest/organic growth
83%
Stay the same/no change
53%
Contract/scale down
64%
Struggle to survive
54%
What are small businesses prioritising in order to achieve growth?
For the vast majority of small businesses, controlling costs and cashflow was a critical priority. For those looking to expand, the top consideration was looking at new markets overseas – a clear sign that small businesses are already adjusting to a worldview beyond the EU and the need to forge new business alliances.
A financial makeover was also a priority for many. Some business owners wanted to re-assess their current finance commitments whilst others were looking out for suitable finance partners beyond their high street bank. Investing in new equipment was a priority for around one in seven respondents – and it was a top consideration in agriculture (35%), media (21%), hospitality (21%) and construction (19%).
Top 10 initiatives to secure growth in the next two months
Keeping fixed costs down
54%
Improving cash flow
34%
Being stricter on getting paid on time
24%
Expanding into new, overseas markets
22%
Investing in new equipment
15%
Re-assessing finance commitments
12%
Streamlining suppling chain
9%
Moving location / bigger office
7%
Seeking funding from a partner other than our bank
6%
Securing finance to replace key assets
4%
Which businesses are spreading their wings?
With the recently formed Government committed to helping British businesses to compete on the international stage, media IT/telecoms and manufacturing emerged as the sectors where small business owners were most likely to be considering overseas expansion. Regionally, pretty much across the UK, more than a fifth of small businesses were looking to grow their ventures overseas.
Percentage of small businesses looking to expand to new markets overseas to achieve growth – by sector
Q3 2019
IT & telecoms
34%
Media & marketing
33%
Manufacturing
32%
Construction
21%
Medical & health
21%
Finance and accounting
21%
Retail
17%
Transport & distribution
17%
Legal
15%
Hospitality and leisure
13%
Real estate
10%
Agriculture
3%
Percentage of small businesses looking to expand to new markets overseas to achieve growth – by region
North East
28%
East Midlands
26%
London
25%
South East
24%
West Midlands
24%
East
24%
North West
22%
Wales
22%
South West
21%
Yorkshire/Humber
17%
Scotland
14%
Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance commentated: “The relative size and agility of Britain’s smaller businesses positions them well to react quickly to the post-Brexit landscape and adjust their plans to compete and grow. The relatively high number of business owners that is looking abroad to identify opportunities presents grounds for confidence and optimism.
“When considering the broader range of growth initiatives, access to finance was also an important consideration for many small business owners. Whether this be reviewing current commitments or investing in new equipment and assets, access to the right products at the right time is crucial to power growth. Hitachi Capital Business Finance is working hard to support small business growth at a critical time for the economy at large.”
