UK SMEs missing out on growth opportunities due to reluctance towards international expansion

Each quarter, we publish the Marktlink Monitor, a survey that explores the key concerns of SME entrepreneurs across Europe. We examine trends, challenges, and ambitions among business owners in the Netherlands, Belgium, Germany, Denmark, and the United Kingdom. This provides both us – and the entrepreneurs themselves – with clearer insights into their needs and the opportunities available to them.

For this edition of the Marktlink Monitor, we surveyed 1,066 European SME directors and managers through Panelwizard. The group included businesses with 10 to 200 employees, comprising 299 participants from the Netherlands, 104 from Belgium, 110 from Denmark and Sweden, 329 from Germany, and 224 from the United Kingdom.

Many entrepreneurs underestimate the benefits of international expansion

Our latest Marktlink Monitor reveals that while 20% of UK SME owners believe there are insufficient growth opportunities in the domestic market, only 11% would consider selling their business to a foreign buyer.

This hesitancy extends to acquisitions as well. Nearly half (49%) of SME owners have contemplated acquiring a foreign company, yet only 8% express a preference for such a move.

These figures suggest that many UK SMEs are underestimating the benefits of international expansion, potentially overlooking valuable opportunities for growth and value creation.

Optimism about UK economy

Interestingly, more than half (52%) of UK SME owners expect their businesses to become more attractive to foreign buyers and investors in the near future. This reflects optimism about the UK economy and a latent interest in international engagement. However, the low preference for cross-border transactions indicates that many entrepreneurs may lack awareness of the strategic potential and benefits these opportunities could bring.

Bridging the knowledge gap

This highlights a clear knowledge gap among UK SME owners when it comes to international mergers and acquisitions. As a result, there is a vital role for advisors to play in educating business owners about the potential advantages of expanding into foreign markets and the strategies needed to succeed.

Victoria Ansell, Joe Moran, and Jonny Parkinson, managing partners at Marktlink’s London, Midlands, and North West offices, shared their perspectives on these findings:

''Pursuing international opportunities isn’t just about accessing new technologies, talent, and capital – it’s also about overcoming the constraints of the UK market size. With our strategic access to mainland Europe, UK SMEs are uniquely positioned to capitalise on cross-border opportunities.’’

‘’Our research highlights a significant chance for UK SMEs to gain traction in international markets. However, the reluctance to engage with foreign buyers or sellers suggests that business owners may be unnecessarily limiting their growth potential. By avoiding global opportunities, they risk missing out on larger customer bases, diversified revenue streams, and valuable partnerships that can drive innovation, competitiveness, and long-term value.’’

‘’At Marktlink, we have a vast global network that allows us to connect business owners with partners who have extensive expertise in their local markets. This not only facilitates a smoother entry into international markets but also enables SMEs to leverage local insights for sustained success.’’

‘’Through one-on-one consultations, local masterclasses, tailored ‘options reviews’, and comprehensive advisory services, we are committed to guiding UK SMEs as they navigate the complexities of global markets. Our goal is to help entrepreneurs overcome perceived barriers and unlock their potential on the global stage.”

The findings from the latest Marktlink Monitor serve as a call to action for UK SMEs to embrace the opportunities presented by international expansion. With the right guidance and resources, the benefits of going global could prove transformative for businesses seeking to achieve long-term growth and value.