Going global next step for SMES
The year ahead will be critical for the Scottish economy. With the complete lifting of coronavirus restrictions in sight, and businesses beginning to identify a clearer path to the future, we can expect the next few months to be telling in terms of resilience and ambition.
SMES within Scotland are facing many of the same challenges as businesses further afield. Inflation is rising at pace, many are feeling the impacts of a talent shortage, and the Ukraine-russia conflict is impacting trade and certainty about the future.
However, Scottish SMES will also be concerned with pressures closer to home, like the increase in National Insurance contributions, as well as minimum wage rates, which will add up to 2.5 per cent to payroll costs.
While Scottish SMES are broadly confident about the year to come, the number of businesses that expect to secure investment in order to grow is perhaps surprisingly low according to available data.
As wider economies such as China and South Korea demonstrate the potential for a strong recovery from the pandemic, pursuing opportunities internationally will be an important means to recovery and growth.
During the pandemic, one of the main business opportunities came from the increase in digital offerings and demand for online services. With greater digital capabilities, SMES can enter new, geographically distant markets that may have previously only been reachable at great expense.
This means that international growth and an increased global footprint isn’t only attainable for larger businesses. This is particularly true when it comes to e-commerce, and with other economies such as China using this type of trade to prosper, Scottish SMES shouldn’t be afraid to export in this way too – after all, this is how the majority of Scotland’s £3.8 billion whisky is sold worldwide.
After a couple of years in various lockdowns, it is now critical to unlock opportunities in new economies where possible.
For example, Edinburghbased advertising technology firm, Good-loop recently closed a Series A funding round worth £4.5m, allowing it to expand its product more widely into a US market. Scottish golf technology company Shot Scope also secured £1.5m of funding to help it scale internationally and sell its product in stores across the US.
With economies including Scotland’s recovering quickly post-pandemic, it’s not just securing funding that is essential. Branching out and successfully growing globally where possible will be an important next step for SMES.
Andrew Walker, Partner and Head of Corporate Growth at Morton Fraser