By Allen Jones.
The headline of our latest blog came about following analysis by our team into the potential for UK businesses to improve their productivity and make more of the export opportunity afforded in the current operating environment. It seems our observations are spot on with International Trade Secretary Liam Fox reported as being set to say that Britain can be a ’21st Century exporting superpower’ in a speech detailing the government’s post-Brexit ambitions.
We have to agree and believe that leasing is one of the key tools that businesses, especially SME’s can harness to seize the day.
Last year, UK exports of goods and services rose to a record high of £620 billion. At this level, exports represent 30% as a proportion of UK GDP, Liam Fox wants this to grow to 35%. To achieve this, The Federation of Small Businesses (FSB) has said that businesses need more financial incentives, such as grants and “export vouchers.” Certainly, such Government help would be very valuable, but then so would access to the cutting edge tools and equipment that leasing can support while facilitating cash flows and those all-important financial ratios.
What is clear is that a productivity shortfall is stifling UK growth. UK productivity is no higher today than it was before the 2008 financial crisis and this is unquestionably hurting businesses, especially when it comes to exporting, in what are highly benevolent market conditions. Increasing use of leasing can help ambitious companies to get the technology and equipment they need. Rather than await government help that may be slow to come, if it ever comes at all. Vendors and their finance channels need to be smarter at making the availability, benefits and price of leasing more accessible.
Our analysis suggested to us that many businesses are falling short of realising the opportunity presented to them today. Government figures today put that number at some 400,000 firms that could export goods and services, but that are not doing so right now.
Our work suggests four factors are stifling SME growth:
- The pace of change
- Access to appropriate finance
- A lack of financial knowledge
It seems business want to grow but feel restrained by their knowledge and agility. Equipment vendors can help bridge this confidence gap and take a lesson from the new car market over the last decade; clear monthly affordability information in marketing has driven sales. Add in the cashflow and flexibility benefits, where leasing can support areas such as technology upgrades, and leasing can be seen as very compelling and affordable; of only those businesses with unfulfilled growth aspirations knew it.
The challenge is in overcoming the in-built conservatism in the UK that often features in business. Leasing can ensure that fast-growth companies can have up-to-date technology with its associated speed and efficiency benefits and free up cash to spend on activities that drive growth. The whole journey starts with affordability using leasing calculators to bring the ease of access to life.
In our personal lives, increasingly, we operate in a Netflix subscription model; use not ownership matters. The same can be true for business success and leasing on a monthly basis can work for all parties. Presenting monthly leasing payments in marketing is central to winning the hearts and minds of a business audience looking for growth right now.