Scottish Firms Missing Out On Growth Opportunities By Not Exporting
• Close to 60 per cent of small businesses in Scotland are missing out on growth opportunities by limiting themselves to domestic markets
• Just under a third of firms already exporting are planning to create as many as 30 local jobs over the next 24 months
• Small businesses call for external support to help fulfil their growth ambitions
Businesses in Scotland are failing to recognise the growth opportunities offered by trading internationally, while those who are exporting are already reaping the benefits, according to new research by Bank of Scotland.
More than half (60 per cent) of attendees at the bank’s ‘Backing Your Ambition’ event, held at the Assembly Rooms in Edinburgh, said they aren’t currently exporting, despite 100 per cent agreeing that British products and services have a good reputation overseas.
In contrast, those already engaged in export activities are experiencing growth, with just under three quarters (72 per cent) expecting to create up to ten new jobs within their organisations over the next two years.
For around one fifth (19 per cent) of small businesses in Scotland, the Eurozone is the biggest target export market, despite its recent instability. Just a small number concentrate their efforts further afield, with 11 per cent trading with North America and 3 per cent for both the Middle East and Africa.
Of those currently trading overseas, hitting a critical mass in the UK was highlighted as the biggest factor in their decision to export.
More support needed for small firms looking to export
Small business owners said that more external advice is needed if they are to move into international markets. The top areas they feel they need guidance in include market research (27 per cent), followed by both marketing (22 per cent) and financial support (22 per cent).
Illustrating the importance of having a focused strategy when looking to export was Dougal Sharp, managing director and founder of Innis & Gunn, who spoke at the event. He said: “As a unique craft product with its heritage firmly rooted in Scotland, provenance is a key pillar of Innis & Gunn’s back story and an integral part of our global outreach.
“When considering a new market we do our research properly. Our outlook is more like a spirits company as we go where there’s a strong market pull. Our focus is on building businesses of scale in the markets that present the greatest opportunity.
“We don’t apply a ‘one-size-fits-all’ approach to market planning. We have open dialogue with our customers; our product strategy is a collaborative process, which we adapt to better respond to their needs, the mutual objective being to improve our sales performance.
“It is this strategic planning which, since we first start started exporting to Sweden in 2004, has led to international sales accounting for over 70% of our sales. We now export to more than twenty countries globally, are the number one import ale in Sweden and top British bottled beer brand in Canada, and continue to grow, both overseas and at home, year on year.”
Graham Blair, area director for SME Banking Scotland, Bank of Scotland Commercial Banking, who also spoke at the event, added: “While it is positive to see that a good proportion of local firms are already trading internationally, many are missing the opportunities that lie in foreign markets.
“Considering the rate of change the economy is experiencing, in today’s competitive global marketplace it is increasingly important for small firms to expand their horizons and actively seek out new opportunities overseas to avoid getting left behind.
“Realising the full potential of international trade needs preparation and planning, especially if you’re starting to export for the first time.
“As with any business investment, guidance from an experienced professional can be key to breaking into new markets successfully.”
The Edinburgh Backing Your Ambition event was held at the Assembly Rooms, Edinburgh, where business leaders gathered to discuss international trade opportunities. Guests heard from Carlos Guallart, a representative from UK Export Finance and Steve Turner from Scottish Development International.