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SMEs Look Overseas To Ease Domestic Pressures

By Steve Pateman
Head of UK Corporate and Commercial Banking
Santander

Good entrepreneurs are always looking for opportunities even when the economy is struggling, which has clearly been the case over the past two years as the UK has battled through recession.

However, many small to medium enterprises (SMEs) owners have grasped the opportunities that have been available thanks to the weakness of Sterling against major currencies, according to recent research carried out on behalf of Santander Corporate Banking.

The UK has not been the only country in recession but SMEs have managed to substantially increase export sales. Our research shows 41% of SMEs who export have seen an increase in their overseas sales in the past year.

This has not simply been a matter of luck or reacting to the weakness of Sterling as a one-off. Around one in 10 exporters deliberately targeted overseas sales as a way of offsetting the decline in their domestic market.

They have succeeded in markets which have also been in recession with 34% reporting a rise in sales from the European Union while 18% have boosted sales in the US and 12% have improved sales in Asia including China.

As you may expect larger businesses have also been looking to expand the role which overseas sales plays in their balance sheet. More than half (58%) of the businesses we surveyed with an annual turnover of £25 million or more, saw a rise in export sales. By contrast, over a third (35%) of companies with turnovers of less than £1 million saw a rise in export sales.

Clearly size can matter but it is also the case that being successful at exporting is not just a matter of selling the same UK goods and services overseas. There are issues of language, culture, currency exchange, payment collection and... continued on page two >

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