Entrepreneurs come in all shapes and sizes. And during European SME Week, we have recognised, promoted and celebrated this entrepreneurial spirit. But while it is the case that all good things must come to an end; the event’s enthusiasm doesn’t, and shouldn’t, stop there.
Now is the perfect opportunity to reflect on enterprise across Europe, particularly the growth potential of SMEs across the continent.
Small and medium businesses may well be a mainstay of the European economy, but if they don’t change tact, they’re in danger of becoming outpaced. In fact, by 2020, it's estimated that 70 percent of world growth will take place in emerging economies.
There are more than 20 million SMEs in the EU, representing the vast majority of European business power. Here lie millions of opportunities for a boosted economy, improved employment and business growth. But what’s interesting is that much of SMEs’ potential lies not in what they do domestically, but their activities overseas. Currently only 13 percent of European SMEs are doing business beyond EU borders.
In 2013, the UK recorded the strongest export growth in the EU, outstripping every other large economy. But while the UK is paving the way for exports in Europe, clearly more can be done across the region. There is much more potential yet to be uncovered.
Europe accounts for only 12 percent of the global population - businesses who do not export beyond the EU are missing out on reaching the other 88 percent - equivalent to approximately 6 billion future customers.
One message that came loud and clear out of this year’s SME Week was the need for smaller enterprises to be bigger, bolder and braver if they want to succeed in the coming years. This means being bigger in their launch strategies, bolder in diversifying their offering and braver by tapping into new global markets.
Turning challenges into chances
The path to international success is not always smooth. There are numerous barriers which commonly prevent SMEs realising their true potential. According to the Great British Export Report, research carried out for the FedEx Small Business Centre, common barriers when looking to export are: knowledge, time and insight.
Significantly, interviewed SMEs reported they found the world's second-largest economy, China, as the most challenging market to export to – meaning countless missed opportunities for growth as economic conditions improve. From supply chain issues to language barriers and customs duties: these are concerns that I regularly hear from SMES across Europe.
In short, European SMEs are missing the wood for the trees. They worry that exporting overseas is going to be a time and resource intensive endeavour. What they are forgetting is that as an SME, you don’t need to be an exporting expert. That is the job of your logistics provider. Which is why gaining the right support, early on, is critical to success.
An example close to my heart, of an SME which is flourishing beyond its own border, is Bremont – a luxury watch company launched in 2007. The founders, Nick and Giles English, wanted to capitalise on the British revival of watch-making and demand for UK goods overseas.
Bremont regularly navigates the complexities of watchmaking in the hyper-competitive world of luxury goods, importing watch components for handcrafting and exporting finished watches – in itself an internationally complex endeavour. With guidance from global trade experts at FedEx, Bremont was able to smoothly manage customs and turn their attention to customer service and delivery – critical for a luxury brand.
Unlocking value from your supply chain
For bigger, bolder and braver SMEs, a key to sustaining success is assessing each link in your supply chain and anticipating potential issues before they arise. This can often spark additional value generation ideas or methods to streamline processes.
For example, when exporting goods, think of creating a “passport” for your shipment, ensuring certain checks are made prior to transportation - exactly as if you are going on holiday. A good transportation and logistics provider can help here - seeing customer pain points which may previously have gone unidentified and explaining the local rules of play.
Being bigger, bolder and braver doesn’t mean risky business for SMEs. It simply requires small businesses to have conviction in their exporting decisions, and recognise that going global, doesn’t mean going it alone.
Written by David Binks, President for Europe, Middle East, Indian Subcontinent and Africa, FedEx Express