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17 March 2013

FSB wants tailored support for small firms to encourage first time exporters

Reference number: PR/2013/13

FSB News Release

PR 2013 13

Issue date: Sunday 17 March 2013

FSB wants tailored support for small firms to encourage first time exporters

The Budget must focus resources on encouraging businesses to export for the first time if the Government is to meet its target of 100,000 new exporters by 2020. This is the message from the Federation of Small Businesses (FSB) as research shows small business exporters have not grown in the last two years.

FSB research in 2010 found that 23 per cent of members exported compared to 21 per cent in 2012. With new and small businesses expected to drive growth to reach Government''s targets, the FSB believes that UKTI must use the £70 million announced at the Autumn Statement to encourage more first time exporters through dedicated help and advice.

The FSB has welcomed UKTI plans to fund more local trade advisers, but believes this help does not go far enough and a larger cultural shift is required to understand the different support that micro and small businesses need.

FSB research has found that 24 per cent of exporters say that finding customers in a new market is difficult. The FSB also wants to see UKTI targeted to help small businesses find solid business leads in new markets.

With almost two in five respondents (39%) saying they would welcome tailor made support for small firms, the FSB is encouraging UKTI to develop a micro desk aimed at the very smallest of businesses where accessible support and a named contact are available to take a first time exporter through the steps needed.

Of the businesses that do export, 23 per cent have said that a lack of finance has been a challenge. The FSB would like to see a referral mechanism in place so that where banks cannot provide finance that other options such as UK Export Finance (UKEF) is promoted. Worryingly, awareness levels of UKEF are very low with only 13 per cent of small business exporters aware of the scheme.

With more funding being given to UKEF at the Autumn Statement, a more effective communication and referral system with the banks is needed so that firms are directed to this source of finance.

John Walker, National Chairman, Federation of Small Businesses, said:

"The UK''s export strategy must focus on matching a company's export potential to the right overseas market. The majority of our members still export to the eurozone but many are looking at other markets to target. Despite the obvious economic challenges, we believe that support should still focus on the EU as well as emerging markets.

"December''s trade figures from the Office for National Statistics showed the value of UK exports fell by £2.4 billion and our research showed in 2012 that the number of firms reporting an increase in exporting activity fell, and the number of firms who decreased exporting activity rose. What we need to see is clear advice for businesses that want to export for the first time and help for those that want to increase the amount they already export.

"The Government has clear aims of what it wants to achieve. But to do this it must encourage more businesses to export and the ones that do so already to do more. This can be quite a daunting prospect for a small firm so tailored step-by-step support, with help to meet customers is something UKTI needs to look at. Too many FSB members are under the impression that UKTI support is for big business and not smaller firms. If these actions are put in place it will help open up the support to more businesses."