Brexit: Impact on Small Business
It is said that Brexit has been one of the most significant events in recent history in terms of potential impact. Prior to the vote there was a debate as to how much it would affect small businesses, with some feeling that Brexit would reduce interference from Europe and benefits for export businesses while by contrast others suggested that impacts on trade deals and increased costs on imports would negatively affect businesses.
In a recent survey 24% said Brexit directly affected their company on a national level while 20% believed that it was too soon to comment on whether or not there had been a positive or negative effect.
What was interesting was the view on whether or not Brexit was positive for business owners. 40% of owners felt that Brexit had been positive for their business while 43% said they had seen a decrease in their business since Brexit.
There are also interesting variations in different regions- in the North-East 71% felt that they had not really been affected while in Wales it was 69%. In terms of businesses engineers seemed the most satisfied with Brexit (65%).
While it seems people seem to be upbeat this doesn’t seem to be entirely reflected in terms of business decisions- 76% of companies surveyed said they either delayed spending or investment plans because of the uncertainty surrounding Brexit.
The first thing to make clear is that the process of Brexit formally begins with the activation of Article 50. Before that is the negotiation in terms of trade agreements, immigration controls and so forth.
In the meantime it is a good opportunity to assess your relationship with your suppliers and how to effectively prepare for when Brexit occurs. By doing this you can minimise any potential problems.
As stated before if you are a business that deals in exports there is the benefit of the pound against the Euro, the 15% drop in price helping British products to become more economically competitive in that area.
Reviewing the situation
It is also fair to say that the recent change in government has meant we will see a possible new direction in terms of how the Brexit strategy is handled- positions have been taken up by people who championed both Remain and Leave so it will be interesting to see how the exit is negotiated and the long term prospects for businesses. It is a difficult balancing act as the needs of businesses to have access to free trade has to be tempered with other concerns such as immigration controls.
What does seem to be the case is that a lot of businesses involved in the exporting of goods seem to be feeling the best short term benefits of Brexit while others still seem to be either uncertain or feeling that their immediate circumstances have not been impacted. It will be interesting to see when Article 50 is activated who will benefit and the long term effects for small businesses. What is certain is that businesses want certainty and the sooner that can be delivered the better it will be for companies of any size, small, medium or otherwise.