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 – 91 per cent expect to be trading still in a year’s time, which is above elsewhere in the UK – the number of businesses that expect to secure investment in order to grow is perhaps surprisingly low according to available data.
Indeed, data from ACCA shows that Scottish SMEs aren’t (generally speaking) planning to secure funding for growth in H1, yet with the number of hurdles Scottish businesses will need to overcome in the year ahead, funding is surely likely to play an important role in pursuing growth.
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 Scottish businesses 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. A multinational business can be smaller in size, when enabled by digital trade. 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.
As some international economies have unlocked at pace, Scottish businesses have an opportunity to reinvigorate mindsets and revamp international ambitions. After a couple of years in various lockdowns, it is now critical to unlock opportunities in new economies where possible.
For example, Edinburgh-based 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 after successfully trading digitally using ecommerce to do so previously – and it’s this type of global mindset that will bring benefits.
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 – and likely natural – next step for SMEs.
