In June, the United Kingdom voted to leave the European Union. In the immediate hours after the vote, the top order fell, and the future looked bleak. In June and July, it seemed as though the United Kingdom was staring down the barrel. But since the result three months ago, things have changed and stabilised. The UK has a new Prime Minster, and the economy has recovered from the initial shock.
Since June, those running a small business may well be worried about how Brexit could affect it.
Despite the uncertainty, small businesses exude positivity…
A survey, conducted after the referendum result by Enterprise Nation has found that in spite of Brexit, two-thirds of small businesses expect to grow in the next six months. Alongside this, a further study published this month by the Bank of Cyprus found that Britain’s smallest businesses are ‘confident about their life after Brexit,’ with the EU referendum decision having had little impact on business sentiment. Whilst reports of this nature are encouraging, there is still some angst amongst Britain’s smallest firms, especially from those with interests in both the UK and Europe.
As the UK lays draws up its plans before enacting Article 50 of the Treaty on the European Union (it is worth noting that the UK has not left the EU yet), small firms should now consider what their businesses may look like following this. And whilst this process will differ from sector to sector, now is certainly the time to prepare for any forthcoming changes.
123 Reg believes that guidance and support for small businesses during this time is critical – small businesses were thriving before the referendum and there is no reason why they shouldn’t, post. That is why we have spoken with two experts who have begun this process. Emma Jones, the founder of Enterprise Nation and Caroline Sparks, owner of Turtle Tots, help answer the key questions that small businesses are still asking.
As small businesses begin to assess changing conditions, the key question for many is, should they be worried?
[Emma] ‘First off, nothing much is likely to change for the next two years as trade deals remain in place with 27 EU states and more deals will open up with countries outside the EU. There’s no time to worry about anything – small businesses have to focus on taking action to get their business Brexit ready ie speak to any existing European partners or customers and agree on arrangements, whilst also researching new markets. Opportunities are there for those willing to look for them.’
[Caroline] ‘I think small businesses should be aware and mindful of Brexit, but also realise that nothing is likely to happen immediately. The fluctuating exchange rate currently does have an effect on our business and any changes in the law could be problematic because we will need to review all our existing contracts and legal documents. However, we take the view that Brexit will also offer huge opportunities for our business too, and embrace the changes it will bring.’
What opportunities could arise?
[Caroline] ‘At the moment we don’t know what the exact opportunities may be. Over the past months, we have had a fluctuating exchange rate, which can have an effect on businesses. Any changes in the law could also be problematic and should be looked into and be aware of. However, we take the view that Brexit will offer huge opportunities as long as businesses embrace the changes that it brings.’
Being adaptive and flexible is one the characteristics that set small businesses apart. Emma explains why this will be crucial and help to ease any uncertainty.
‘Small businesses are amazing at responding to new and changing environments. Entrepreneurs and founders will adapt. Rather than viewing Brexit as a ‘good’ or ‘bad’ thing, small businesses should assess their risks and opportunities and move forward from there.’
How should small businesses prepare for Brexit?
[Emma] ‘Enterprise Nation is creating a wealth of content and resources aimed at helping businesses. Small businesses should continue to look to their trusted sources of support for information and guidance. Remember, nothing significant will change for two years but small businesses should look into the following as soon as possible.’
- Assess risks – will your costs rise if you’re importing, are any revenue lines in doubt etc? If so, get these risks covered and speak with financial advisers
- Research opportunities – changing markets always equals opportunity. Consider new markets such as selling to government in the domestic market and look to new markets such as US and China where the Chancellor is heading to do favourable trade deals
[Caroline] ‘At the moment, we are keeping an open mind, yet preparing and finding out as much as we possibly can. Many lawyers, banks and organisations are keeping customers informed as much as possible, and I would advise other businesses to lean on business support groups for advice and to keep abreast of the changing climate and structure.
What next for SMES?
[Caroline] ‘In time we think British brands will benefit from being aspirational throughout Europe as they are in Asia – and the effect “Brand Britannia” will grow, signifying that products and services from Britain are high quality and aspirational.’
[Emma] ‘There is no time to worry about anything – small businesses have to focus on taking action to get their business ready for Brexit. Opportunities will always be available for those willing to look for them.’
The prevailing message that small businesses should take away is that nothing has happened yet. Whilst the past few months has created some uncertainty, it is important that small businesses relax, and reflect on their individual situations before making any business critical decisions. Brexit does not signal the end for small businesses, in fact, it has the potential to offer new opportunities that businesses may not have thought of before. But in order to take advantage, businesses need to remain flexible and open for the new opportunities.
Has the vote for Brexit affected your business? Why not leave your experiences in the comments to help other businesses.