34% of business owners like to stay ‘close to home’ and look for cultural similarity to the UK when choosing new markets, according to new research
British small business exporters are confident about prospects in 2015, according to research conducted by Open to Export, the online export community backed by Government and the private sector and sponsored by HSBC.
Seventy-eight per cent of business owners and managers believe that 2015 will be better than 2014, with the most popular new markets for exports being Europe (59%) and North America (44%).
Over 400 British exporters, including over 270 business founders, shared their views at Export Week events across the country and via the Open to Export website about what was driving small businesses to export and what influenced their decision to choose a particular market.
When looking to new markets, respondents like to stay ‘close to home’, with over a third (34%) saying that ‘cultural similarity to the UK’ heavily influenced their decision. Public image also plays a part in decision-making, with 17% highlighting ‘positive media coverage of destination’ as a factor. Having friends or family in the location, or having cultural roots in the country, were each highlighted by 12% of SMEs.
Following Europe and North America, the most popular regions for export growth were identified as the Middle East (39%), Australasia (33%) and the Far East (31%). The region that saw the biggest rise in export interest was South America, with 27% of SMEs planning to export there in 2015, with just 19% currently doing so.
Business-to-business (B2B) firms appeared more likely to expand further afield than business-to-consumer (B2C) firms. According to the survey, 35% of B2B firms are planning to sell into Africa and 36% intend to expand into South East Asia next year, compared to 20% and 22% respectively for B2C firms.
Rationale among business owners and managers for choosing new export markets was largely driven by business opportunity and market analysis. A third of SMEs said that market analysis and research was the biggest factor in choosing where to export. Almost a quarter (23%) said that export markets were driven by incoming sales enquiries, while 14% said that existing business connections were the main factor. Only 4% said they relied on ‘gut feeling’.
The survey found that employees at exporting SMEs are almost twice as likely to lead with research and analytics, with 40% saying it was the biggest factor, compared to 23% of SME founders saying it was their top decision-making factor. The factors influencing founders were more varied and included a higher propensity to be influenced by competitors and family connections.
Commenting on the findings, technology entrepreneur and Open to Export’s chairman Julian Hucker said, “Through our community and interviewing SMEs at Export Week, it’s heartening that business owners and managers are confident of their prospects for 2015 and are looking into a wide variety of markets, with Europe and North America dominating”.
“Exporting to a new market is a big decision for many small businesses and with 57% looking online for information to help researching new markets, Open to Export aims to make it easy for them to find access to all the best information and support what’s out there. Government bodies, trade associations, in-market experts, commercial specialists and experienced exporters can all be found contributing content and advice through Open to Export’s forum, webinars and guides,” continued Julian.
When looking at confidence in improving conditions for exporting, the most optimistic region was the Midlands, where 86% of respondents believe that 2015 will be better than this year. This was followed by the North East on 80%. The least confident region was Wales, on 60%.
By 2016, Open to Export aims to help 20,000 businesses by offering free access to its forum, webinars and industry contacts. The results from this survey will help shape the content and features available to ensure a relevant and responsive service for its community of over 6,000 registered users.
Principal Partner HSBC was announced as the first corporate sponsor of Open to Export last month, supporting the service alongside founders Department for International Trade, the Federation of Small Businesses, the Institute of Export and marketing solutions and websites provider Yell as part of its ongoing commitment to helping businesses of all sizes achieve their growth ambitions.
HSBC will be contributing content to the website and have presence at key industry and trade events throughout the year and across the UK alongside Open to Export in order to engage customers and prospects face to face and connect them to practical support.
Companies can browse the site and register for free at www.opentoexport.com
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Notes to Editors
For enquiries relating to Open to Export:
Austin Brailey / Phil Szomszor
PR for Open to Export
0203 170 8008
For enquiries relating to HSBC and HSBC’s partnership with Open to Export:
Senior Media Relations Manager
HSBC Commercial Banking UK and Europe
About Open to Export
Open to Export is the Government supported free, online community for UK companies looking to grow internationally. It brings together experts from across the private sector and government agencies to help small and medium sized UK businesses successfully enter international markets.
Users can gain practical insights on key international trade topics from webinars, guides, case studies and special features, as well as getting bespoke advice from experts and peers in the Q&A forum. The content is produced by users and industry experts, and anyone who has value to offer exporters can contribute.
Open to Export became a not-for-profit Community Interest Company (CIC) at the beginning of 2014 and is part of the Government’s SME export strategy. It has the support of Department for International Trade, the Federation of Small Businesses, the Institute of Export, and marketing solutions and websites provider, Yell as its founders. It will continue to operate as an independent open platform.
The company is led by an independent non-executive Chairman – tech entrepreneur, Julian Hucker.
For more information, please visit www.opentoexport.com
About HSBC Commercial Banking
For nearly 150 years we have been where the growth is, connecting customers to opportunities. Today, HSBC Commercial Banking serves businesses ranging from small enterprises to large multinationals in over 60 developed and faster-growing markets around the world. Whether it is working capital, trade finance or payments and cash management solutions, we provide the tools and expertise that businesses need to thrive. With a network covering three quarters of global commerce, we make HSBC the world’s leading international trade and business bank.
For more information see www.hsbc.com/1/2/business-and-commercial