High-growth businesses and expanding abroad: Crucial to the UK’s prosperity

The Trailblazers research reveals that 74% of high-growth companies already trade internationally or plan to do so in the coming 12 months, compared with 63% of lower-growth firms.

Trailblazer High Growth

Ambitious international strategies

High-growth businesses are not deterred from exploring international markets. Far from it – Santander’s Trailblazers research indicates they understand exporting offers the potential for a step-change in growth and that overseas geographies can provide a rich seam of opportunities, even when faced with headwinds in the wider global trade picture.

The Trailblazers research reveals that 74% of high-growth companies already trade internationally or plan to do so in the coming 12 months, compared with 63% of lower-growth firms.

Moreover, high-growth businesses are likely to pursue a much more expansive international strategy: half (50%) say they plan to increase overseas sales in the year ahead compared with 30% of lower-growth firms, while high-growth enterprises say they are also far more likely to enter new international markets in the next 12 months.

Almost a third (31%) of high-growth firms plan to increase sales to EU member states, despite Brexit-related uncertainty, in the next year –almost twice the rate of lower-growth businesses (16%). More than a quarter of high-growth companies (27%) will seek new opportunities in North America (compared with 15% of lower-growth firms), while 25% are looking to Asia (versus 16%).

And while businesses of all kinds would consider a wide range of approaches to exporting – from ecommerce to the local distribution partnerships – high-growth firms are more likely (22% versus 14%) to consider merging with or acquiring a business in their target market in order to realise their export ambitions.

Businesses recognise that international trade provides a great opportunity for UK companies to diversify away from their domestic market. What is clear from these figures is that high-growth businesses have tendencies to be far more ambitious in their growth strategies. This includes being more likely to export in the first place to having a more vigorous approach to expanding international sales, and even showing significantly greater willingness to take bold steps such as acquiring businesses in their destination markets.

Expanding abroad is particularly important as we transition through the biggest change in our trading environment for generations: Brexit. Our research shows that high-growth businesses are more likely to see positives and less likely to see negatives from Brexit than lower-growth firms: A third (33%) of high-growth companies in our survey expect Britain’s departure from the European Union to have a positive impact on their business, compared with just 9% of lower-growth firms.

And 30% of high-growth firms expect Brexit to affect them in a negative way, compared with 55% of lower-growth companies. Furthermore, high-growth firms are more likely to be at an advanced stage of planning for the potential side-effects of Brexit – 38% of them say this is the case against 30% of lower-growth enterprises.

‘Proactively seeking opportunities’

This attitude – towards an event that is causing unprecedented levels of uncertainty for UK businesses and the economy– is a clear illustration of the mind-set that sets these high-growth businesses apart. Despite the potential challenges and complications caused by Brexit, they are proactively seeking out the business opportunities that Brexit could bring.

The Trailblazers research consistently shows that high-growth businesses are less concerned than firms that are growing more slowly about factors that are outside their control – for example, general economic conditions or political uncertainty - even though these things can impact significantly on any business. The entrepreneurs and management teams leading these businesses accept that they are going to face hurdles from time to time. But their mentality is that they need to best prepare themselves to overcome them.

It is vital that the private and public sectors understand that successful high-growth and expanding abroad are key drivers for business success. It is essential both work together to ensure as many businesses as possible have the support they need to seize the opportunities that trading internationally can bring.

Meet the Trailblazers: Our research into Britain’s high-growth companies

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