This reluctance extends to acquisitions as well, with nearly half (49%) of SME owners having contemplated acquiring a foreign company and only 8% expressing a preference for such a move.

These statistics suggest that many UK SMEs are underestimating the benefits of international expansion, potentially missing out on valuable opportunities for growth and value creation.

The research comes from international M&A advisory firm, Marktlink, and is the fourth report from its Marktlink Monitor series. Aiming to shed light on the attitudes of UK SME owners towards international expansion and M&A opportunities, the findings reveal a significant disconnect between the perceived abundance of domestic opportunities and the untapped potential for growth in international markets.

The report also reveals that over half (52%) of UK SME owners expect their companies to become more attractive to foreign buyers and investors, indicating an optimistic outlook toward the attractiveness of the UK economy and a latent interest in international engagement. However, the low preference for international transactions suggests that many business owners may lack awareness or understanding of their strategic potential and possibilities that can be explored with such an approach.

Importantly, this highlights a significant knowledge gap among UK SME owners regarding international M&A opportunities and presents advisors with a crucial responsibility to educate business owners about the potential advantages and strategies associated with expanding into foreign markets.

Victoria Ansell, Joe Moran and Jonny Parkinson, managing partners of Marktlink’s London, Midlands and North West offices, respectively, shared their thoughts on the findings: "Pursuing international opportunities isn’t just about accessing new technologies, talent pools, and capital sources – it’s also about overcoming the limitations imposed by the size of the UK market. With our strategic access to mainland Europe, our UK SME clients are uniquely positioned to capitalise on cross-border opportunities.

"Our research has revealed a significant opportunity for UK SMEs to gain traction in international markets, yet the apparent reluctance to engage with foreign buyers or sellers suggests that business owners are limiting their growth potential unnecessarily. By shying away from more global opportunities, they may be missing out on expanded customer bases, diversified revenue streams, and valuable partnerships that could drive innovation and competitiveness and, in turn, drive value.

“At Marktlink, we have a vast global network which enables us to connect business owners with other parties who possess extensive expertise in their local economies. This connection not only facilitates smoother entry into international markets but it also empowers SMEs and entrepreneurs to leverage local insights for sustained success.

"Through one-on-one consultations, local masterclasses, tailored ‘options reviews’, and the provision of end-to-end advisory services, we will continue to intensify our efforts to educate and guide SME owners on the benefits of international expansion. Collectively, we’re committed to helping UK entrepreneurs navigate the complexities of global markets, overcome perceived barriers, and unlock their potential on the global stage.”

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