A recent survey by Airwallex has found that UK SMEs are becoming highly motivated to expand abroad over the next year.
According to Finextra, a survey that collected input from 500 UK-based SMEs found that a majority were focused on markets in Europe and North America.
Up to 64% of SMEs surveyed said they plan to expand to the two key markets in 2023, with 81% in the next five years. The remaining 34% said they plan to expand to APAC, Latin America, Africa, and the Middle East in 2023, with 60% looking to expand into these regions by 2028.
The highest level of SMEs – 46% – in the survey said they were reinvesting profits as a strategy, while 38% plan to rely on partners and 27% on bank loans. One third of the respondents plan to build new trade partnerships and a little over 25% aim to establish channel partnerships to facilitate expansion in 2023.
In addition, plans for growing abroad dropped from 85% to 70% when polled in May and October respectively, indicating confidence in the future of UK businesses in coming years.
The survey also suggested optimism among SMEs to expand beyond their borders. However, according to Airwallex head of growth Juan Diego Farah, expansion will have to be conducted in a deliberate and focused manner to manage costs and complexity market.
Employee retention and investment in people to combat the declining market are also important factors for SMEs raised in the survey. 42% of SMEs are migrating towards digital and fintech platforms as opposed to traditional banking strategies to optimise productivity and reduce costs.
Airwallex recently extended its Series E to bring in a further $100m, which has lifted the company’s valuation to $5.5bn.
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