Small exporters are being left behind, and it's putting growth at risk

International Trade Week has just come and gone, but for many of Britain's smallest exporters, there was little to celebrate. Fresh data reveals a widening gap: while large firms are winning overseas orders, micro-businesses are struggling to gain traction in international markets – and the economic implications are significant.

The export divide is widening

New figures from the British Chambers of Commerce show a clear, unbalanced reality. Over the summer just gone, most micro-exporters - businesses with fewer than 10 employees - reported flat or declining overseas orders. Larger firms, meanwhile, saw growth.

The pattern repeats across export sales, new orders, and market confidence. Small firms aren't just growing more slowly; in many cases, they're losing ground. And the economic stakes are notable. 

The BCC estimates that even modest export growth from small businesses could add a couple of percentage points to national GDP, and yet the gap continues to widen.

Why micro-exporters face greater barriers

The challenges are partly structural. Post-Brexit trade with the EU now requires customs declarations, broker services, and “rules of origin” paperwork for every shipment. These administrative processes carry fixed costs that don’t necessarily scale with the value of goods. 

A customs broker charges roughly the same fee whether they're processing a high-value shipment or a small order. The same applies to courier handling charges and administrative fees. For a large shipment, these costs represent a tiny fraction of the total value. For a micro-business sending a low-value order, those same fixed costs can represent a substantial percentage.

And the regulatory burden extends beyond Europe. Different product standards, certification requirements, and documentation for each market create fixed costs that larger firms can spread across higher volumes. However, small exporters face similar costs, but with far fewer sales to absorb them.

Tariff volatility has also caused some buyers to delay orders – a disruption that larger exporters with diversified markets can manage more easily. According to the ONS, around a quarter of UK businesses cite economic uncertainty as their primary pressure. For small exporters operating on tight margins, this often translates into postponed expansion plans.

The scale advantage

Larger firms often have dedicated export teams, specialist advisers, and the resources to manage extended payment terms and spread risk across multiple markets. 

Micro-businesses, by contrast, tend to have limited staff and budget, meaning owners often handle export compliance and logistics themselves. While government support programmes exist, they can be time-intensive and may be harder for very small firms to access.

Managing financial risk while trading internationally

While these structural challenges persist, micro-exporters can take steps to protect their businesses from some of the immediate financial risks. 

• Business insurance can safeguard goods in transit – important when a single lost shipment could significantly impact quarterly results.

• Cashflow management becomes particularly important when dealing with extended payment terms. Tools like business credit cards can help manage smaller overseas expenses while potentially earning rewards, while a business overdraft facility can bridge short-term cash gaps. 

• For businesses with proven international demand but limited working capital, business loans might support scaling into established markets. 

• Building reserves through business savings accounts can also provide a buffer against payment delays.

What this means for UK growth

The concentration of export growth among larger firms means fewer businesses are exposed to international opportunities, and regional economies - where micro-businesses are often based - see fewer benefits from export revenues.

It also represents a significant untapped potential. Britain has thousands of micro-businesses with competitive products, but for many, the transaction costs of exporting exceed the potential returns at current volumes.

The BCC’s research suggests this gap may continue to widen. As compliance requirements evolve and geopolitical uncertainty persists, the fixed costs of exporting are likely to remain high. Without changes to how small-scale international trade works, micro-exporters may increasingly focus on domestic markets, leaving international trade concentrated among larger firms.

What could help narrow the gap

Reducing this divide would likely require changes to how international trade works for small volumes. 

This could include:

• Simplified customs processes for low-value shipments

• Mutual recognition agreements that reduce compliance costs

• Trade finance products designed for smaller transactions

• Platforms that allow micro-businesses to pool shipments and share logistics costs.

Some of these would require policy changes, while others might emerge from private sector innovation. But the current reality is that the economics of small-scale exporting remain challenging compared to larger operations.

The question for policymakers and the business support sector is whether the conditions for small-scale international trade can be improved, and whether doing so would unlock meaningful economic growth from Britain's thousands of micro-businesses with international potential.