How Brexit is affecting small business
It is now 2 months since the historic Brexit vote and, whilst the UK has not yet started the formalities of exiting the EU, there is a growing awareness that we are living in post-Brexit days. The Telegraph Small Business Connect community recently asked its members for their thoughts and comments on the impact of Brexit so far on small businesses. So far there seem to be both perceived advantages and disadvantages.
We summarise the findings below.
- One of the positive impacts of a weaker pound is that it makes the UK more affordable as a holiday destination for tourists and also encourages ‘staycations’ to rise in popularity.
- The weak sterling situation can be leveraged to make businesses that export to other countries such as the US, Canada, Australia and parts of the EU more competitive which is causing orders to accelerate. In particular, those who pay in Sterling are getting excellent value for money.
- Businesses that present themselves as being a British success story - particularly if the product can't be obtained anywhere else - have no reason to see sales decline post-Brexit.
- The potential relaxation of employment laws could reduce the red tape for businesses involved in employing staff, and bring greater flexibility to adjust their workforce in the future.
- Access to skills could be a concern if businesses are less able to tap into skilled migrant workers, either existing staff or those in the pipeline.
- Some small businesses are concerned over how the EU funding gap will be filled and fear that either their growth may be stifled or they may struggle to maintain their current size.
- The decline in the value of sterling this year (around 20%) has led to extra costs for businesses that import some of their raw materials, which then have to be passed on to our customers or taken out of profit margins..
- If we leave the EU’s customs union (as Switzerland and Norway have) this will make exporting more complex with the reintroduction of customs clearance procedures.
Over and above all these ideas was a common concern about the uncertainty over the timing and process of Brexit:
“The main concern for me is the plan – or lack of – for moving forward. Will we ever be given a concrete date and terms for Brexit?”
“We would like the government to outline our ‘exit’ and ensure we strike the best possible trade deals for the UK. The initial backlash of Brexit hasn’t been as bad as first thought. If anything it’s generated an unexpected opportunity. But uncertainty is still hanging around.”
“The biggest question is simply: what will Brexit look like?”
At Fair Business Loans we will watch with interest over the next few months as Theresa May propels her new government forward along the Brexit pathway to a future that is - as yet - unclear. For us, however, it is “business as usual”! For any small business funding needs - irrespective of Brexit and what the future holds - we are still here for you so do get in touch if there is any way we can help you negotiate the post-Brexit waters.