The weaker pound has forced more than two thirds of Britain’s SME importers to raise prices, according to a recent report.
While exporters are benefitting from the weaker pound, 61 per cent of importers have increased prices by an average of 9 per cent in the past 12 months.
The new research by East & Partners for American Express found that while nine in ten SME exporters are doing well, with increased profits of 16 per cent, 81 per cent of SMEs who only import are suffering, with margins falling an average of 13 per a year on average.
SMEs that both export and import proved to be the most confident, with 95 per cent saying the decline in the value of sterling had boosted business and increased profit margins.
Jose Carvalho, Senior Vice President, Global Commercial Payments Europe at American Express, comments: “Exchange rates have a huge impact on UK SMEs with an international footprint, and on their ability to maintain their place in the local and global economies. Those already involved in exporting are seeing the business benefit, and whilst others currently focused on domestic activity might be daunted by the idea of exporting there are plenty of resources out there for ambitious businesses.”
“With the right tools and resources, your businesses can unlock growth opportunities both at home and abroad.”
Fluctuating exchange rates and currency volatility represents a risk to small and medium sized businesses. It is therefore essential that UK SME business owners maintain effective management of their company’s working capital and put processes in place to survive and thrive in challenging times.
Our experts at Beavis Morgan work with SMEs across a broad range of sectors, assisting with their business plans, establishing the market for their product through research, analysing their financial requirements both now and for the future, and putting processes in place to enhance cashflow, leverage tax smart strategies, minimise risk and drive financial success and business performance.