The comment follows Bibby Financial Services’ SME confidence tracker, which revealed that just 20% of SMEs both imported and exported.

The research also found that just one in 10 SMEs planned to invest in their international trade capability between April and July.

Why are SMEs sceptical about exporting?

Craig Durnell, managing director of export at Bibby Financial Services, felt that there was no simple answer, but revealed that in its recent trading places research 67% of SMEs trading overseas had been financially disadvantaged due to currency volatility sparked by Brexit.

“In addition to currency exposure, knowledge and access to markets, as well as trading with different cultural and business terms can hold businesses back from seeking export opportunities.”

John Davies, director at Just Cashflow, added: “Maybe it is lack of confidence of entering the unknown that is one of the key issues holding businesses back.”

Adam Tyler, executive chairman at the Financial Intermediary & Broker Association (FIBA), felt that ambivalence may be to blame.

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“Expanding or starting a business which places overseas markets as a part or all of any firm's sales strategy is to be encouraged, but with the current political climate dominated by Brexit and the wider implications of the growing incidences where free trade is being challenged by protectionism, it is understandable that firms would be a little cagey.”

Rob Kelly, head of sales (UK) at Scottish Pacific, said that while some people may think that the statistics suggested that SMEs were sceptical of the benefits of exporting, the reality was that SMEs were hugely successful at identifying market niches and leveraging those niches. 

“These statistics reflect that many SMEs already know where they are being successful and wish to stick with what’s already working well for them. 

“For many SMEs, this will be in their home markets. 

“There will also be some SMEs who actively choose not to try to expand into overseas markets because of lifestyle choices (for example, breaking into new markets in other countries often involves lots of travel, which can impact adversely on family life in particular).”

What are the pros and cons of exporting?

Craig explained that exporting could help SMEs reach larger markets that would have otherwise been impossible, as well as drive significant growth.

“Our research has shown that on average, exporting accounts for 37% of annual turnover for those UK SMEs that sell overseas.

“For example, one UK SME, Chameleon Art Products, has seen rapid growth since its inception in 2013.

“Its goods – manufactured in China – are shipped to 80 different countries, aided by the support from our export finance team.”

However, Rob warned that trying to break into larger markets could consume a lot of time, energy, money and resources without any guarantee of success.

“So, like everything in business, exporting comes with risks as well as opportunities. 

“In some situations, that time and those resources could be better spent expanding local markets, but the lure of larger markets that exist overseas means that exporting will always be an important part of the business plans of aspirational SMEs.”

Adam added that, in reality, a large number of SMEs don’t have a product that can be exported.

“Not being an exporter does not mean that SMEs are missing out.

“In all likelihood, they probably want to concentrate on their core business and those that do have a hankering to export have a number of options to consider, especially after the dust has settled post-Brexit.”

Christopher Meldrum, national business development director at Aldermore, added that there were many challenges that SMEs faced when planning to set their sights beyond the UK shoreline.

“Our recent Future Attitudes research found that 24% of business owners admitted the primary obstacles is the strength of currencies versus the pound, closely followed by Brexit (23%), and customers and administrative entry procedures (22%).

“That said, fourth fifths of SMEs are expecting to see their exporting by an average of 9% over the next 12 months.

“Of those who do trade overseas, more than half have seen their revenues increase since last year.”

John concluded: “The major contributory factors undermining confidence are a knowledge gap, fear of the unknown and the perceived amount of extra work. 

“Of course, you need to have the right type of product and service, but the benefits of embracing importing and exporting can be significant as it increases the businesses footprint and reduces dependency on just one economic location.”