Leadership & Productivity

The top ten barriers to international growth

4 min read

17 November 2017

Former special projects journalist

Exporting can seem like a monumental task for some, even though there are more avenues than there have ever been before with the rise of online marketplaces for entrepreneurs to sell their wares.

Scaling up overseas can seem incredibly daunting, especially for early stage businesses. Here, we explore the top ten barriers to international growth.

For a lot of businesses, scaling up means taking on the world, and achieving international growth. It can seem like a monumental task for some, even though there are more avenues to exporting than there have ever been before with the rise of online marketplaces for entrepreneurs to sell their wares.

Things are currently a little uncertain for would-be exporters in the UK as we wait on tenterhooks to find out the ramifications of leaving the EU. Trade deals are yet to be decided, and for some businesses it can be hard to know which countries are the most viable targets at this moment in time.

However, opportunity is what you make it. It has been noted previously in this series that a weaker pound has opened doors for many UK exporters.

A weaker pound means UK prices are more competitive abroad than they once were, and therefore a more attractive prospect to foreign buyers. The flip side of the coin is that any businesses with foreign businesses in the supply chain may be finding their costs increased, which either have to be absorbed or passed on to the customer.

There is a world outside Europe too, of course. In fact, according to a recent survey by Innovate UK, over 90 per cent of UK scale-ups were either already exporting or planning to within the next 12 months, and the US was the leading destination.

The challenges associated with exporting are always changing, as there are so many factors at work. The same survey revealed these are the top ten barriers to international growth, according to businesses.

The top ten barriers:

(1) Difficulties accessing the market – 62 per cent
(2) Not knowing the right people – 59 per cent
(3) Lack of market knowledge – 58 per cent
(4) Legal/regulatory environment – 50 per cent
(5) Logistical difficulties – 35 per cent
(6) Advisors not providing the right help – 35 per cent
(7) Cultural differences – 33 per cent)
(8) Lack the right expertise within the business – 30 per cent
(9) Lack of technology/infrastructure – 24 per cent
(10) Too risky/fear of failure – 17 per cent

It is worth noting that, while investors’ opinions on the greatest barriers to international growth were broadly in line with businesses’, there was one clear difference.

While only 30 per cent of businesses considered a lack of expertise within the business as a key barrier to exporting, 72 per cent of investors cited this is a top barrier.

This is something businesses should keep in mind before pitching to investors for funding for global expansion projects – and ensure they get the required expertise before progressing to this stage.

Overall, there is clearly room for more support for scale-ups when it comes to expanding internationally. In fact, 61 per cent of businesses said they would find it useful to receive help when it comes to expanding internationally.

One respondent to the survey explained: “When an SME is growing and scaling up there is so much you need to know and find out and research and not enough budget or specially trained staff to do that. It would be so good to have a hub or a one-stop shop to find all this stuff out.”

This article is part of a wider campaign called the Scale-up Hub, a section of Real Business that provides essential advice and inspiration on taking your business to the next level. It’s produced in association with webexpenses and webonboarding, a fast-growing global organisation that provides cloud-based software services that automate expenses management and streamline the employee onboarding process.