Small businesses switch to domestic UK market as perceived growth opportunities in EU stagnate
The proportion of small businesses that see growth opportunities from the domestic UK market has risen sharply from 66 per cent to 80 per cent in just 12-months, whilst those looking to trade overseas has stagnated, according to new research from Novuna Business Finance.
The findings from the quarterly Business Barometer study comes at a time when overseas travel has been seriously disputed and the European Commission has claimed that the damage caused by the UK’s exit from the EU was becoming more evident.
Rather than the rise in red tape, paperwork and broader checks pointing to a decline for the UK small business sector, the Novuna Business Finance data suggests small businesses are switching focus to growth opportunities in the domestic market - a move which also supports the UK economy at large.
Eight in 10 UK small businesses (80 per cent) are now looking to open up new markets within the UK, with enterprises in construction (94 per cent), legal (91%), agriculture (88 per cent) and hospitality (87 per cent) pushing hardest to open up local markets.
Aside from chaos at the ferry ports and airports and the headache of red tape, the research also suggests sustainability factors may be playing their part in encouraging some small businesses to look closer to home to secure growth. For business that were taking steps to improve their position on carbon neutrality, 81% were looking to open up new markets within the UK.
Despite talk of devolution and Brexit, small businesses in Scotland and Welsh were most likely to be looking for growth opportunities within the UK (87 per cent and 84 per cent respectively), whilst London enterprises were the least likely (73 per cent). London small businesses were those most likely to look for growth in the USA (29 per cent) and Europe (27 per cent).
For small businesses looking overseas for growth opportunities, there was little positive change on July 2021, although the EU remains the top overseas growth market for UK enterprises.
The appeal of North America and European markets outside the EU remains unchanged, suggesting little meaningful progress has been made opening up markets beyond the EU. No small businesses are currently looking to trade with Russia.
Jo Morris, head of insight at Novuna Business Finance commented: “Whilst small businesses are operating in volatile and uncertain market conditions, our quarterly data suggests the proportion of enterprises predicting growth has remained remarkably stable for the last five consecutive quarters. This consistency is the result of small businesses embracing change and being agile.”
“In an age when managing costs is a top issue for many enterprises, the renewed focus on the domestic market will make financial sense for many business owners - plus the reduction in travel is probably good news for the planet.”
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