Research and analysis

DIT qualitative segmentation of UK businesses: pen portraits (web version)

Published 14 July 2020

Research overview

Priorities and objectives

DIT’s priorities and objectives have been laid out in the HM Government Export Strategy:

• adopt a business-led approach to engage with current and potential exporters
• deliver value for money by applying a proportional approach to allocating export support
• help businesses address a range of practical barriers that are currently preventing them from reaching full export potential

DIT focuses on supporting all business sizes to export. However, not all business will need the same intensity and level of support.

According to the ONS, there are 2,668,810 registered businesses in the UK and SMEs account for over 99%. Of these, the clear majority are micro 0 to 9 employees (89.4%), small businesses with 10 to 49 employees represent 8.7%, MSBs represent 1.5%, and large businesses 0.4% (250+ employees).

According to HMRC, large businesses contribute the majority of the value of goods exports (55.8%), medium size business contribute 14.7% and micro and small businesses a combined value of 14.7%. As business get bigger they are increasingly able to cater for larger export contracts, owing to their larger size, resources and capabilities.

Turnover is a very good indicator to start directing businesses to the right support and arrive at a proportional approach to service provision. Therefore, a key focus in this report is the estimated 425,000 businesses over £500,000 turnover. Having achieved £500,000 turnover, these businesses are of a scale where they have the potential to add significantly to the value of UK exports, but are not so large that they will always have already seriously looked into exporting.

Segmentation of the UK business population

A segmentation of the UK business population was created to help DIT work more effectively with businesses. The purpose is to improve the efficacy of targeting, design, and delivery of export promotion services to UK businesses. There are 4 key groups based on businesses exporting journeys. Across 4 groups, there are five types of interventions that businesses would benefit from. There are 11 segments made different by how DIT should engage with them.

Sustain (35%) – are currently exporting

Interventions that businesses would benefit from are:

• Sustain: nurture and grow
• Sustain: develop export capability
• Sustain: communicate benefits
• Sustain: increase competitiveness

Reassure (7%) – were previously exporting but haven’t in the last year

Interventions that businesses would benefit from are:

• Reassure: nurture and grow
• Reassure: develop export capability
• Reassure: leave be
• Reassure: change the game

Promote (12%) – not currently exporting but product suitable or could be developed for export

Interventions that businesses would benefit from are:

• Promote: develop export capability
• Promote: communicate benefits
• Promote: change the game

Challenge (39%) – have never exported and don’t believe their product / service is suited

Not a key target for further exploration so not sub-segmented.

Method and validation

Qualitative research has sought to validate and embed the segmentation across DIT.

Creating a series of pen portraits to bring to life and differentiate the segments. Each segment is illustrated with a composite pen portrait – humanising and essentialising it’s key characteristics.

Method and sample

• x60 1-hour teledepths with owners / senior decision makers – from survey recontact sample
• SME population - 0 to 249 employees, £500,000 to £50 million turnover, England only
• range of sector, size, and location

Segment	Interviews
Sustain: nurture and grow	10
Sustain: develop export capacity	11
Sustain: communicate benefits	10
Sustain: increase competitiveness	10
Reassure	9
Promote: develop export capacity	5
Promote: communicate benefits	5

Pen portraits were not made for the Challenge segment or Promote Change the Game as they are not key targets. Reassure was combined due to sample limitations.

Discussion flow

Businesses exporting journeys were mapped in the interviews:

1. Business background
2. Attitude to exporting
3. Business exporting journey – includes triggers, motivations and barriers
4. Support needs
5. Close

Overarching contextual findings

Associations

‘Exporting’ was widely associated with large businesses and the manufacturing sector. Some smaller businesses and those providing services who were exporting did not identify as ‘exporters’.

These associations can act as a barrier and mean that some SMEs do not consider exporting to be for them.

Extent to which each association was mentioned by the businesses that took part in then research.

From most to least:

• large businesses
• shipping / transporting
• products
• manufacturing

When people think of exporting they think of lorries and exporting a product, rather than niche services.

(Professional services, 10 to 49 employees, £2 to 5 million)

Showcasing a wider range of exporters could help businesses to identify as exporters and show non-exporters that it is for them.

Benefits and barriers

Exporting was widely seen to be risky, complicated, and hard work, but potentially a profitable opportunity for those willing and able to take on this challenge.

Overall business’ approach to exporting was commonly haphazard and decision making was characterised by constantly weighing up these risks and benefits.

Benefits:

• revenue
• profit
• growth

We’re mature in this [UK] market, but we’re immature in others. We know there is potential in overseas markets and we are keen to try and tap into that.

(Retail, 1 to 49, £2 to 5 million)

Barriers:

• risky
• complicated
• hard work
• hassle

We work far better on a local level rather than working on an international basis which would mean completely changing the structure of how we do things.

(Scientific, 50 to 249, £500k to 2 million)

Triggers for exporting

Businesses had commonly been triggered to start exporting reactively in response to client demand. –Although exporting was central to some companies’ core business model.

People have come to us, and we wouldn’t turn business down.

(Retail, 10 to 49, £500k to 2 million)

Triggers from more proactive to more reactive:

• individual champion
• business growth strategy
• response to UK market saturation
• core to business model
• response to competitor
• urgent need for growth
• client demand

Motivations for exporting

Profit and growth were businesses’ main motivations for exporting, but they were also driven by strategic, personal, and moral motivations.

It is growth but it is also networking. The more customers you support in a wider global reach, the more financial benefit comes with that.

(Manufacturing, 50 to 249, £10 to 50milion)

Motivation pyramid has moral at the top and financial at the bottom.

Moral:

• customer need (for example care sector)
• staff morale
• national advantage (probed only)

Personal:

• staff skills (for example languages)
• travel

Strategic:

• reputation / brand development
• partner / network opportunities
• product / offer improvement

Financial:

• revenue / profit / growth
• core business model
• normal in their industry
• diversification - protection from UK market volatility / decline

Case studies about financially successful exporters are likely to be the most effective way to motivate non-exporters.

Barriers to export

But businesses commonly faced multiple barriers which were preventing them exporting / exporting more - which they said they did not have the time or resources to address.

We said no, as there is lots of growth happening here at home and we’ve been focussing on our short term goals, which have been taking all our energy. To export isn’t for us yet.

(Professional services, 10 to 49, £10 to 50 million)

Context:

• sufficient opportunity in the UK / current client profile
• downturn / lack of stability in their market
• EU Exit uncertainty

Network:

• lack of trusted suppliers
• lack of trusted clients / contact networks
• lack of local advisers

Capability:

• lack of confidence in business export capabilities (knowledge of financial, legal and regulatory requirements, sales / marketing / logistics / processes, linguistic / cultural skills

Product:

• product/offer not export ready (lack time/investment)
• export markets not known / identified

Identity:

• did not identify as an exporter
• exporting a risk to their UK business
• lack of bandwidth for strategic vision

Support needs

There were a range of support needs. Promote / Reassure businesses commonly needed introductory information, while Sustains more commonly needed more detailed and specific support.

Introductory support:

• why export?: case studies showcasing exporting benefits
• how to export: introductory guide
• setting up exporting: logistics and technical requirements

Advanced support:

• grants and financial assistance
• market scoping and market research
• marketing support
• client networking
• networking with partners, suppliers, local advisers
• linguistic and cultural support
• detailed information to support business capability
• product development support

Businesses did not generally see DIT as a source of exporting support –and wanted to know more about DIT’s support offer and to see it advertised more widely.

Engaging with exporters

Harnessing businesses trusted networks is likely to be the most effective way to reach and engage them on exporting.Businesses commonly wanted information via email but generally agreed they were likely to miss/ignore it.

Where do I look [on the DIT website]? There is nothing here for me that I can see from this landing page … its all stats but nothing about helping businesses.

(Accountancy, 0 to 9, £500k to 2 million)

There’s so much junk mail that comes out as well that [information] does need to be seen to be coming from someone who is verified.

(Waste management, 0 to 9, £500k to 2 million)

Trusted networks:

• trade / industry bodies, propfessinal associations, FSB, CoCs
• financial networks (HMRC, banks, insurers, tax agents, accountants)
• regulatory bodies
• shipping agents / freight forwarders
• local growth hubs
• business advice / enterpreneur networks

DIT website:

• advertise DIT support offer - send to website
• improve website signposting and offer
• reactive advice service (email and phone)

Social channels:

• social media posts (LinkedIn)
• You Tube tutorials
• podcasts
• interactive webinars

F2F advice:

• face to face advisory visits when setting up or changing direction
• conference, seminars, trade fairs, exhibitions

Local experts:

• local advisers and experts
• FCO reps
• UK businesses working there

Pen portraits

Key drivers

There were 4 key drivers of attitudes to exporting which characterised and differentiated the segments.

Attitudes to risk:

• risk taker - comfortable taking risks
• calculated risk taker -weights up risks strategically
• cautious - nervous about taking risks
• risk averse - avoids risk

Approach to exporting:

• strategic - engages in forward planning
• proactive - actively seeking opportunities, but less strategic
• reactive - responds to client demand
• disengaged - turns down exporting opportunities

Confidence in export capabilities:

• very confident - very confident in skills and abilities
• confident - confident in skills and ability to learn / prepare
• not very confident - nervous about capabilities / skills
• not all confident - nervous about ability to grow skills

Identity:

• global - open - see themselves as a global business
• opportunistic - open to reacting to global client demand
• global - closed - exporting but not actively seeking new global opportunities
• national - open - open to becoming an international business
• national - closed - identify as a British business, exporting not part of their business identity

Segment characters and differentiation

Attitude to risk, engagement, confidence, and identity characterise and differentiate the segments.

Sustain

Nurture and grow:

• attitude to risk: risk taker
• approach to exporting: proactive
• confidence in export capability: very confident
• identity: global - open

Develop export capacity:

• attitude to risk: calculated risk taker
• approach to exporting: strategic
• confidence in export capability: confident
• identity: global - closed

Increase competitiveness:

• attitude to risk: cautious
• approach to exporting: reactive
• confidence in export capability: not very confident
• identity: global - closed

Communicate benefits:

• attitude to risk: risk averse
• approach to exporting: disengaged
• confidence in export capability: not very confident
• identity: global - closed

Reassure

Reassure:

• attitude to risk: risk taker
• approach to exporting: reactive
• confidence in export capability: confident
• identity: opportunist

Promote

Develop export capacity:

• attitude to risk: cautious
• approach to exporting: strategic
• confidence in export capability: not at all confident
• identity: national - open

Communicate benefits:

• attitude to risk: risk averse
• approach to exporting: disengaged
• confidence in export capability: not at all confident
• identity: national - closed

Looking for their next exporting opportunity

Exporter description

A highly confident global exporter, always seeking new business opportunities which is:

• a risk taker
• growth focused
• proactive

Sustain - Nurture and grow - 9%

Profile

Currently exporting and have been doing so for some time – skilled, resourceful, dynamic, and successful.

The opportunity to make money is vast … the potential for business, outweighs the difficulties.

(Retail, 10 to 49 employees, £10 to 50 million)

Risk taker - sees risk as a key part of business, may have experienced loss in the past but confident to take risk in future.

Proactive - proactively seeking new opportunities; looking to grow and make profit and exporting is opart of this - and know they could be doing more.

Very confident - very confident in themselves, their business and product - and their ability to sell it.

Global - open - global business - the world is their oyster.

Motivators and barriers

Drive to grow, make profit, and expand their product / service outweighs risks and motivates them to overcome complexity barriers.

Motivators ranked by importance across segment sample::

• profit / growth
• core business model
• reputation / brand
• expand networks
• opportunity to improve product
• diversity income
• travel opportunities

Barriers ranked by importance across segment sample::

• EU Exit uncertainty
• currency fluctuation
• trusting suppliers
• trusting clients
• complexity
• market knowledge
• cost of sales resource
• language / cultural

Messaging

Managerial capacity

Majority agreed that their business has enough managerial time to focus on exporting. Three quarters (75%) agreed that their business has the capability to assess international competition. But 49% did not think that their business has the capability to undertake a market research study.^{[footnote 1]}

Attitude to support

Whilst already having some of the most developed exporting skills, capabilities and set-up, these businesses were more interested than others in receiving support. More likely to have heard of/visited the Exporting is Great site than other businesses. Over three quarters (77%) thought that they had good knowledge about where to go for help and support with exporting. ^{[footnote 1]}

Recommended messaging

It is great that you are already exporting champions –and that you know how to find support –but there is more specialist support available from DIT to help you grow and expand your portfolio further.

Support for ‘sustain: nurture and grow’ businesses

How to support these businesses: help them find their next export opportunity and provide detailed technical information on request to add to their current expertise and experience.

Support ranked by importance across the segment sample:

• networking opportunities to help find their next opportunity
• strategic new market information
• detailed specific information on request
• marketing advice
• product improvement service
• financial support for market research and r&d

Channels and messengers include:

• happy to use the DIT website but want to see improved signposting
• trusted networks -professional associations, trade bodies, FSB, Chambers of commerce, entrepreneur networks, shipping agents, buying groups (manufacturing)
• trade press
• conferences and seminars
• direct email

Could be exporting ‘Champions’ and give advice to other businesses.

Case study: SME in luxury leisure / hospitality sector

Profile:

• leisure / hospitality
• 10 to 49 employees
• £2 to £5 million turnover

The SME exports 15 to 20% of their business to France, Spain, Italy, Switzerland and a some countries outside the EU.

Exporting story:

• been exporting for 15+ years. Very positive about the opportunities it presents and keen to expand their portfolio over the next 5 years. A confident risk taker, need to take risk to grow. Harnesses their networks to find new opportunities. Confident in their ability to sell their product and address project challenges as they arise. Desire to expand further across Europe
• initially triggered by a query from a client who came to them via a customer referral –and now gain work through their client networks
• profit and growth are key motivators, they want to expand the business and charge higher profit margins on export work. International work boosts their reputation and luxury brand and brings them ‘kudos’ in the UK market too. Business relies a lot on referrals and word of mouth, so international work expands their client network. Participant also personally enjoys international travel and good weather opportunities
• have faced risk and challenges –but always worked to overcome them to grow the business. Have faced language barriers, but always found good interpreters. Check health and safety and employment regulations carefully, as they have been fined for breaches. Plan extra resource for logistics and find trustworthy suppliers in new markets for high quality equipment and logistics

It’s a statement in the industry that you are trusted and can successfully work in another market.

Support needed

• DIT-led proactive work with embassies, signposting to UK businesses
• access to local experts
• financial grants for market sizing and market research and tax relief
• easy to navigate, up to date portal with regulations for each country (for example tax, VAT, employment & H&S regulations)

Channels / messengers

• chamber of commerce
• trade press

Working to achieve steady, sustainable growth

Exporter description

A solid and reliable business, looking to steadily increase exporting potential which is:

• strategic
• precise
• professional

Sustain - Develop export capacity - 9%

Profile

Currently exporting and has been doing so for some time –a quality focused, safe pair of hands.

I’m sure there is a market out there that we can tap into. It is just a matter of how do we do it and how do we safeguard ourselves.

(Manufacturing, 10 to 49 employees, £2 to £5 million)

Calculated risk taker - risk is necessary -but seeks to minimise risk by identifying the best value opportunities.

Strategic - strategic approach to exporting –sees exporting as important to growing the business; will conduct comprehensive research and prepare thoroughly.

Confident - confident in their product and business -know that they are prepared, highly skilled and capable.

Global - open - a global identity – looking for their next best value opportunity.

Motivators and barriers

The benefits of exporting outweigh the costs –but need to be confident of the reward to take the risk.

Motivators ranked by importance across segment sample:

• profit / growth
• insulation from UK market downturns
• demand for product / services
• networking
• reputation building

Barriers ranked by importance across segment sample:

• staff capacity
• financial risks
• logistics
• currency fluctuations
• cultural differences
• language capabilities
• managing rules and regulations abroad
• competition

Messaging

Managerial capacity

Most agreed that their business has enough staff capacity to focus on exporting.^{[footnote 1]}

Almost three quarters (74%) agreed that staff in their business have enough skills to focus on exporting.^{[footnote 1]}

Attitude to support

Open to receiving support, but majority do not think that they have good knowledge about where to go for help, information and support with exporting.

Were less likely to think they had good exporting knowledge than other businesses –and are keen to expand their knowledge further.

Almost half (48%) are interested in support with exporting.^{[footnote 1]}

Recommended messaging

It is great you are already an exporting champion –DIT can support you expand your portfolio further by providing up to date and technical information and advice to help you make the best exporting choices.

Support for ‘sustain: develop export capacity’ businesses

How to support these businesses: help them to take risks and provide detailed and precise information about new market opportunities for them to evaluate themselves.

Support ranked by importance across the segment sample:

• financial support to take risks
• detailed and strategic new market information
• up-to-date and detailed information on financial and regulatory environments
• free marketing advice
• networking opportunties
• regular updates on legal requirements in overseas markets

Channels and messengers include:

• Enhance visibility of DIT services and show how it is relevant to those with exporting experience
• improve signposting on DIT website
• regular updates with latest information and changes
• social media targeting
• interactive webinars
• direct email

Demonstrate relevance of DIT support services to reassure of next steps and to enable them to take risks more confidently.

Case study: manufacturer and provider in heat treatment industry

Profile:

• engineering and manufacturing
• 50 to 249 employees
• £10 to £50 million turnover

Exporting story

• set up 25+ years ago. Focus always been UK market but began exporting due to a customer enquiry –they see exporting as important to growing the business, so following this enquiry, they began to market themselves as a global business via their website to build on this opportunity

• optimistic about future exporting capabilities and open to exploring new markets but wants support to do this. A calculated risk taker and seeks to minimise this risk

• global demand for their products/services are the main motivation for exporting, and recognises that this helps to build their international reputation and generate profit. Confident that their product is relevant to overseas markets

• they have faced challenges when it comes to securing payments and hold back if they think there are significant financial risks to the business. Need to be sure that they will get paid -often this relies on local knowledge of rules and practices elsewhere

In the business we are in, the world is our oyster really. But it is about picking the right markets.

Support needed:

• networking opportunities
• advice on accessing new markets
• access to grants to help manage financial risks
• local knowledge of markets

Channels / messengers

• chamber of commerce

Contentedly working hard on what they know

Export description

An experienced, capable and respected professional or craftsman, working hard to maintain their business, but lacking a sense of urgency to drive innovation.

They are:

• satisfied
• solutions oriented
• stable

Sustain - increase competitiveness - 9%

Profile

Currently exporting and been doing so for some time – earnest and likes security but not innovating.

As long as we keep on shipping high quality product at a fair price, then our customers aren’t going to look to change. If they change supplier, and don’t get the same quality, that creates a huge problem for them.

(Manufacturing, 10-49 employees, £10-50 million)

Cautious: Cautious approach to taking risks – worked hard to build their business and content and satisfied with their business model and current exporting profile.

Reactive: Does not proactively seek new opportunities, however will reactively expand exporting profile to protect or maintain business or if it is offered without requiring significant risk or resource.

Not very confident: Confident in their current product / service but less confident in their ability to take on new risks and/or change their current, successful model.

International - closed: International business – curious about new exporting opportunities but not very proactive in seeking them.

Motivators and barriers

Drive to maintain revenue and market position outweigh the barriers to exporting.

Motivators ranked by importance across segment sample:

• maintain revenue / profit
• core business model
• reputation / brand
• expand networks
• diversity income

Barriers ranked by importance across segment sample:

• regulations
• market knowledge
• building trusted network
• complexity
• geopolitcal issues
• cultural issues

Messaging

Managerial capacity

More likely than most other businesses to agree that they have staff capacity to focus on exporting.

86% agreed

Attitue to support

Most are not interested in information and business support services to assist them with exporting.

15% were interested

Recommended messaging

Communicate the risks to their business of not innovating in their market and show that DIT can demonstrate the potential value to the business of growing their profile.

Support for sustain: increase competitiveness businesses

How to support these businesses: persuade them of the need to innovate and risks of not doing so – and help them to find new markets.

Support includes:-

• product / offer development and innovation support
• detailed, specific information/guidance on regulation and tariffs
• strategic new market information
• introduce specific client and partnership oppoprtunities
• networking opportunities (and financial support for this)
• marketing advice

DIT support to focus on the value of innovation and change to growth their business.

Case study: well established company supplying ingredients to food manufacturing and pharmaceutical industry

Profile:

• manufacturing
• 10 to 49 employees
• £10 to 50 million turnover

Exporting story:

• been exporting for 100+ years, since the start of the business. They have a loyal customer base around the world; the specialised nature of the products and expense of product testing ensures a long term investment from their clients - they have served some clients for 30+ years
• exporting is a core part of their business model. They have worked hard to build trusted networks of clients, suppliers and local experts; and they are committed to continuing to work diligently to maintain what they’ve built.
• confident in their product and their ability to address challenges in countries where they have a history of exporting and have built strong networks. However, they are less likely to take risks, and seek out new opportunities, unless driven by a downturn in the market or to meet a client’s needs. Willing to consider highly calculated risks only when necessary
• maintaining a steady revenue is a key motivator. The business relies on exporting to continue to make a profit. Face challenges when it comes to receiving payments on time because of international banking systems; and they face challenges when they have to wait long periods of time to get their products tested for use and insured

Some of our customers we’ve had a relationship with for 50 years so we know we can trust them.

Support needed:

• access to local experts in new markets
• financial grants for market research and to attend conference to build new networks
• easy to navigate, up to date portal with sector specific information about regulations, by country

Channels / messengers:

• chamber of commerce
• trade associations and press

Content with the status quo

Export description

Had often grown their exporting profile organically without needing a great deal of risk or resource, and now satisfied with their exporting status quo.

They are:

• content
• complacent
• disengaged

Sustain - communicate benefits - 7%

Profile

Currently exporting and have been for some time – exporting was either triggered by an individual champion or client demand – and fitted their model and did not require significant investment / risk.

Its just another revenue source for us, not sure what else there is to say … there are not really any other benefits.

(Accountancy, 1 to 9, £500k to £2 million).

Risk averse: Content with current profitable exporting profile and arrangements and adverse to taking new risks which might threaten this or incur costs.

Disengaged: Exporting came about organically either from a change in staff or through client referral – proactively seeking new clients is not a priority as take current success for granted.

Not very confident: Confident in current model – but not confident in their ability to move into new areas – as current exporting profile was relatively easily set up (particularly sector specific regulations).

International - closed: Prefer to play it safe and keep steady – rather than looking for new opportunities and taking risks to grow the business.

Motivators and barriers

Motivations currently outweigh barriers – but only when exporting is low risk and does not involve too much hassle, risk, and additional resource.

Motivators ranked by importance across segment sample:

• profit / revenue
• easy translation of current model

Barriers ranked by importance across segment sample:

• compliance and legal concerns
• investment and resource required for set up
• resources required for finding and maintaining new client relationships

Messaging

Managerial capacity

Three quarters felt that they had the capability to assess the cost of exporting.

But only 44% felt that there is opportunity for their business to grow internationally –less than other businesses.

Attitude to support

Less likely than other businesses to want information and business support services to help with exporting

Most had not heard of or visited the Exporting is Great site.

Only 8% had heard of/visited the site.

Recommended messaging

Convince them of the benefits of growing their exporting profile – provide case studies of success of similar businesses in other markets and demonstrate that there is demand for their products/services in other markets.

Support for sustain: communicate benefits businesses

How to support these businesses: Showcase similar businesses that have engaged with opportunities successfully to encourage them to grow their exporting profile and provide accessible information abouttechnical issues related to new markets to boost their confidence.

Support includes:

• simple ‘how to’ guides with set up and expansion information
• show case studies of other successful exporters in their sector with wider profiles
• encourage and facilitate visibility of other opportunities
• information about financial and regulatory issues
• market information
• personalised F2F support to boost their confidence

Channels and messengers

• clearer offer and signposting on DIT website - which is one portal with all the information they need together
• emails and newsletters
• a government hotline - to speed up response process
• conventions and exhibitions - facilitating networking

Case study: SME freight forwarding company

Ships low value goods in Europe.

Profile:

• transport and storage
• 10 to 49 employees
• £500k to £2 million turnover

Exporting story

• exporting for 30+ years. They move low value goods, such as carbon products to be used in metal/steel industry, to factories in Europe but are concerned about the current economic climate. They are currently exporting but have no plans to increase export capability. They plan to remain ‘steady’ in the short-term to reduce any risks associated with exporting to their business
• exporting has always been part of their business model and they are motivated by the balance the organisation has achieved between importing and exporting
• motivated by profit and efficiency: they export low value goods because they are the quickest to find and its cost effective – minimising risk and maximising efficiency
• main challenges are the current political climate which has created some uncertainty making it difficult to enter new markets. Additional concerns about how political changes will impact legislation which intensifies concerns about compliance. They are risk averse and prefer to stick with what they know

We’ll just have to sit on our hands for the moment and see what happens

Support needed:

• networking opportunities with new clients
• networking with new partners and suppliers
• networking with similar successful businesses

Channels / messengers:

• chamber of commerce – a good channel to relay message about exporting and support available

Opportunistic risk taker, lacking an exporting strategy

Export description

An inadvertent exporter - doesn’t identify as an exporter – but has taken opportunities in the past and would again if it was offered in the future.

They are:

• reactive
• resilient
• confident

Reassure - 7%

Profile

Has exported in the past – but reactive to client demand and lacks long term strategy.

We have no plans to grow overseas. Though I am aware of the need to source work from elsewhere. We’ve just grown organically and don’t actively seek out new clients.

(Manufacturing, 10 to 49 employees, £500k to £2 million)

Risk taker: will take opportunities and ‘have a go’at anything that presents itself

Reactive: Does what it is needed to meet client demand in the moment - no long term strategy to maintain or grow business globally

Confident: confident in their own skills and abilities (particularly selling) - but product and processes less well developed

Opportunist: Business UK focussed – but open to any new exporting opportunities that present themselves

Motivators and barriers

Motivators may outweigh risks in the moment – if significant resource and investment are not required.

Motivators ranked by importance across segment sample:

• revenue / profit
• building client relationships
• reputation building
• utilise staff language skills

Barriers ranked by importance across segment sample:

• lack of knowledge (how to start, potential markets)
• managing capacity (physical space and resource)
• put off by previous experience
• lack of language skills
• context - Brexit uncertainty

Messaging

Managerial capacity

Less ability than other segments to develop an export business plan.

50% of Reassure^{[footnote 1]}: DEC agreed that their business has the capability to develop an exporting business plan – this was less than other businesses.

Attitude to support

Not enough perceived knowledge about where to go for information, help and support about exporting.

Not always interested in information and business support services for exporting.

Only 9% of Reassure^{[footnote 1]}: Change the Game were interested in information and business support services.

Recommended messaging

Dedicating resource and investment to exporting is valuable and will generate return for your business. DIT support services can help you develop a long-term exporting plan and to set up exporting in new markets.

Support for: opportunistic risk taker, lacking an exporting strategy

How to support these businesses: show them the value of putting proactive and strategic resource into exporting – and advise on how to export sustainably for the long term rather than just on an ad hoc basis.

Support includes:

• support with strategy and planning
• detailed step by step guides to help build long-term capability
• networking opportunities with long term clients
• market information
• investment for long term planning

Channels and messengers:

• a personal contact within DIT
• trusted networks - professional associations, trade bodies, Chambers of commerce – their magazines and events
• industry networking events - hearing from successful exporting businesses like them
• online tutorials as well as articles on DIT website
• email

Case study: engineering consultancy, reliant on architects in their network for new business

– but this pipeline has dried up during the financial downturn.

Profile:

• engineering
• 10 to 49 employees
• £500k to 2 million turnover

Exporting story

• worked in construction for 30+ years and this business for 10+ years. Enjoys the travel associated with exporting – which is also good for staff morale - but is put off investing in it by complex regulation and payments risk. He would like to do more, but is pessimistic this is possible in the current climate – at the moment they are trying to survive the financial downturn

• typically works for architects building new designs for housing associations, large private housing companies, office HQs, galleries and museums. All work (local and international) comes via their architect networks.

• up until the last 2 years, they had been exporting on 1 to 2 projects per year. They haven’t actively stopped exporting, the work has just stopped coming to them, and they don’t actively market themselves overseas (not the industry norm)

• when they previously exported, it was good for business income, and staff morale, who got a boost from travelling. Throughout their exporting experiences they have faced challenges, such as: non-payments on final invoices when working in the Middle East (now counteracted by accounting for this in their costs and billing more up front), and the need to employ a local contact to ensure final sign off on building sites (deemed an unnecessary extra cost, but again is accounted for in overall costs). They are open to exporting again, with an overall downturn in the market, they don’t believe there is business for them at present

We’ll just have to sit on our hands for the moment and see what happens.

Support needed:

• awareness of DIT and the support it can offer
• learning from experiences of others who have successfully done similar
• advice on how to set-up and strategically plan for exporting in the future

Channels / messengers

• raise awareness and signpost to DIT support
• industry bodies and networks
• conferences/seminars, business fairs

Considered exporting – but nervous about getting started

Export description

Interested in exporting and may have begun to look into it – but cautious and overwhelmed by the complexity and nervous about taking their first steps.

They are:

• cautious
• anxious
• risk adverse

Promote – develop export capability - 4%

Profile

Not exporting – but begun to look into it and aware of the benefits for growth / expansion / diversification.

There’s a big enough opportunity in the UK before we start looking abroad and it’s much easier to exploit than trying to open up an international market.

(Scientific and technical, 50 to 249, £500k to 2 million)

Cautious: exporting seen as risky, done some research but don’t know where to start - concerned about payment, compliance, and administration.

Strategic: know they need to take risk to grow / protect the business – but want this to be strategic and managed – unlikely to jump in. Earnest to create and maintain good client relationships.

Not at all confident: not at all confident in their capacity and capability to export – this drives their nervousness. Fear not being paid by international clients or being let down by suppliers.

National - open: Business is UK focussed and want to protect this – interested in exporting but Brexit climate increases concern about failure / losses.

Motivators and barriers

Barriers currently outweigh the benefits – because don’t have the resources to invest and prepare.

Motivators ranked by importance across segment sample:

• profit / growth
• client demand
• UK market saturation
• diversification for protection
• encourage from new staff

Barriers ranked by importance across segment sample:

• offer not market ready
• lack of market knowledge
• start-up complexity
• lack of investment logistics and processes
• cultural barriers, time differences
• lack of face-to-face contact with clients and suppliers

Messaging

Managerial capacity

Most did not think that their business has enough managerial time to focus on exporting.

38% agreed, which was less than other businesses.

Attitude to support

Very interested in support to help them export.

Less likely than other businesses to feel like they have good knowledge about where to go for information, help and support with exporting.

Recommended messaging

Communicate that DIT is the place to go for support with exporting – and can also signpost to other support. DIT can provide financial support and help you set up your exporting capabilities – and provide introductory legal, financial and regulatory advice.

Support for considered exporting – but nervous about getting started

How to support these businesses: support them to take risks by providing advice and clear guidance to help them begin their exporting journey – simplify complex regulatory and financial requirements.

Support includes:

• basic how to and introductory guides / starter packs
• simplify complex regulatory and financial requirements
• explore partnerships that might help them export
• sector conferences to share experiences and network
• market information
• F2F and phone support and discuss issues and troubleshoot

Channels and messengers:

• F2F support
• signposting to relevant sources for information
• presentations and tutorials – via YouTube
• events - provide the opportunity for networking

Case study: an SME food mixing company

Profile:

• agriculture, forestry and fishing
• 1 to 9 employees
• £500k to 2 million turnover

Exporting story

• predominately a mill and seed mixing company based in the UK. A smaller part of the business is dedicated to selling plant machinery to farms and farm sites. Also import machinery from an EU country but not very frequently. They prioritise their relationships with existing clients and suppliers and do not want to jeopardise these by taking risks in other areas

• they have no plans to actively start exporting in the short-term but would consider exporting their product if there was an issue with their supplier or they wanted to enter into a partnership with the EU based machinery supplier

• they are worried their product would not be profitable outside of the UK and unsure how to look into this due to insufficient market knowledge or knowledge about how to approach this. They are concerned about and unsure how to set up processes to begin exporting, how to manage tariffs, and the long term financial implications and initial cost/investment implications exporting would have on the UK business and how to manage these risks.

The big bearing would be the financial implications in terms of tariffs and things like that and how easy it would be to export for us.

Support needed:

• advice on how to set up exporting – legal, logistics and processes
• investment to get started – market research, product development, infrastructure set up
• interested in events and training
• want a government portal with tax, VAT and regulatory information

Channels / messengers:

• FSB
• industry bodies

Exporting is for other people – not for them

Export description

Hard working SME’s who have built their UK focused businesses from the ground up, and exporting is not part of their identity.

They are:

• UK growth focused
• disengaged
• lacking confidence

Promote - communicate benefits - 5%

Profile

Never exported - exporting is for larger businesses in other sectors.

We’re only a small company and therefore lack the capital to do something like exporting.

(Transportation and storage, 10 to 49 employees, £500k £2 million)

Risk averse: Exporting seen as risky, too complex, could lead to loss of money. Don’t know anyone they could learn from.

Disengaged: still see opportunities to grow in UK, so don’t need to look further afield, prefer to use their limited resources where value is more certain.

Not at all confident: see exporting as complex - don’t believe they have the time to learn - don’t have the bandwidth or resources in their business to make it happen.

National - closed: business is UK focussed – it’s familiar and they know how it works.

Motivators and barriers

Barriers outweigh the benefits – because exporting is not considered to be for them .

Motivators ranked by importance across segment sample:

• profit / growth
• enhance reputation
• overcome UK market saturation

Barriers ranked by importance across segment sample:

• exporting ‘not for me’
• lack of knowledge (how to start, potential markets)
• not a business priority
• complexities of setting up
• risks of not getting paid
• don’t believe they are capable
• Brexit uncertainty
• lack of capital investment

Messaging

Managerial capacity

Much less likely than other businesses to agree that their staff have the skills to focus on exporting.

Only 26% thought that their business has enough capability to undertake a market research study.

Attitude to support

Do not feel like they have good knowledge about where to go for help, information and support with exporting.

Not interested in information and support services – as they do not see it as relevant to them.

Only 7% agreed that they were interested in support.

Recommended messaging

Exporting is relevant and valuable to your business and it is for you. Provide examples of other businesses like theirs that are successful exporters – and how this has benefitted them (especially financially).

Support for Exporting is for other people - not for them

How to support these businesses: raise awareness and persuade them of the benefits of exporting for businesses like them – to show that exporting is for businesses like theirs.

Support includes:

• case studies showing exporting success and benefits for SMEs like theirs
• basic information about starting exporting (for example 10 steps to get started)
• networking opportunities (clients, suppliers, advisers)
• chance to meet Champions
• financial support for market research, training and capital purchasing
• market information

Channels and messengers:

• DIT
• HMRC
• trusted networks - chambers of commerce, Trade organisations
• trade press
• banks and agents

$CTA

Case study: a niche service company, growing in the UK

• with no time to consider exporting, despite interest in their services from abroad.

Profile:

• professional services
• 10 to 49 employees
• £10 to 50 million turnover

Exporting story:

• worked for the company for 10+ years. Company provides facility management, estate management, office and lab accommodation for a scientific research campus in a university town. Over time have grown their campus and developed new made for purpose buildings. Finds it hard to relate to exporting – and sees it as complex and confusing

• currently thinking about ways they could replicate their model in the UK, where there is still a lot of opportunity for them

• other global universities have contacted them to request they run a similar service in their market, but it’s always been turned down. They are put off by the effort they believe would be required to start exporting from scratch, and the need to learn about how to trade in a foreign market – they have no knowledge or in-house expertise about how to deal with this, nor a desire to learn how – and do not believe they have the resource to do this.

• exporting is not a priority for them at present, too much hard work for something they don’t feel is necessary to the success of their business model. If they were to ever work in foreign markets, they would prefer to set up partnerships, rather than actively running the services themselves.

We said no to working with an overseas campus, as there is lots of growth happening here at home and we’ve been focusing on our short-term goals, which have been taking all our energy. To export isn’t for us.

Support needed:

• raising awareness of how exporting could benefit and why it’s worth the effort
• advice on how to set-up and start a new exporting business
• access to local advisors and potential partners
• access to an online resource library

Channels / messengers:

• raise awareness and signpost to DIT support
• entrepreneurs networks, chambers of commerce

Appendix

Achieved sample

The overall target sample for segments, employees and turnover was 60. This was completed.

Table 1: Sample targets and completions by segment

Segment	Target	Completed
Sustain - Communicate benefits	10	10
Sustain - Develop export capability	10	11
Sustain - Increase competitivness	10	10
Sustain - Nurture and grow	10	10
Promote - Communicate benefits	5	5
Promote - Develop export capability	5	5
Reassure - Develop export capability	**	3
Reassure - Nurture and grow	**	4
Reassure - Leave be	**	1
Reassure - Change the game	**	1

** Note the target sample for the ‘Reassure’ group was 10.

Table 2: Sample targets and completions by number of employees

Number of employees	Target	Completed
Fewer than 10 employees	**	17
10 to 49 employees	**	29
50 to 249 employees	**	14
250 or more employees	-	-

** Note: The target was to recruit a mix of stakeholders with a range of employees.

Table 3: Sample targets and completions by company turnover

Annual turnover	Target	Completed
Less than £500k	-	-
£500k to 2 million	**	26
£2 to £5 million	**	12
£5 to £10 million	**	5
£10 to £50 million	**	17
$50 million or higher	-	-

** Note: The target was to recruit a mix of stakeholders with varying turnovers.

The overall target sample for sectors and regions was 60. This was completed.

Table 4: Sample targets and completions by sector

Sector	Completed**
1: Agriculture, forestry and fishing	1
2: Mining and quarrying	0
3: Manufacturing	12
4: Electricity, gas, steam and air conditioning supply	0
5: Water supply: sewerage, waste management, and remediation activities	2
6: Construction	2
7: Wholesale and retail trade; repair of motor vehicles and motorcycles	12
8: Transportation and storage	5
9: Accommodation and food service activities	2
10: Information and communication	3
11: Financial and insurance activities	5
12: Real estate activities	0
13: Professional, scientific and technical activities	5
14: Administrative and support service activities	2
15: Education	0
16: Human health and social work activities	2
17: Arts, entertainment and recreation	0
18: Other service activities	7

** Note: The target was to recruit a mix of stakeholders from different sectors.

Table 5: Sample targets and completions by region

Region	Completed**
North East England	0
North West England	7
Yorkshire and the Humber	5
East Midlands	3
West Midlands	8
East of England	8
South East England	11
South West England	6
London	12

** Note: The target was to recruit a mix of stakeholders from different regions.

1. Data from DIT (2018) Segmentation of UK Businesses: Empowering sustainable export-led growth (PDF, 7,515KB) ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷