Only 37% of UK SMEs ventured into international markets in 2014, a new study has revealed, down from 53% in 2013.
The study, conducted by venture capital firm Albion Ventures, was used to shed light on a seemingly growing issue within the UK – the reluctance or apprehension of international expansion.
A climate borne from global recession, UK businesses remain wary about market conditions, with hopes of a full recovery still in their infancy.
In total, the study revealed that 43% of SMEs experience problems when trying to enter new sectors and geographies. Meanwhile, 16% cited lack of expertise around their target market, 11% said competition was too strong and 8% found they lacked financial resources.
Patrick Reeve, a managing partner at Albion Ventures, said: “Entering new markets can be an exciting yet daunting challenge for many businesses and it’s not surprising that nearly half have encountered problems along the way.”
However, he noted that the UK’s recovery so far could, though indirectly, be a positive factor, with fewer businesses feeling the need to take risks overseas to create growth.
He said: “As the UK economy recovers it’s understandable that small businesses are less willing to take the risk as more growth opportunities appear closer to home.”
Meanwhile, James Taylor, operations director for AngelBerry, a company that has seen successful international expansion over the last 13 months, said: “Dealing internationally can be a pain. Time zones, travel expenses, language barriers and social differences all mean that entertaining a new market takes a lot longer as there are so many new regulations to conform to.
“There will be lots of business that just can’t afford this added capital outlay, hassle and just see the UK as a stronger economy to grow in.”