Find out what Brexit means for small businesses like yours
1 year to go until the UK leaves the European Union…
On Friday, 29th March 2019, the UK is scheduled to depart the European Union. There’s been no shortage of news broadcast on the subject, of course, and the debate still rages on as to what impact this divorce from the EU will have on the UK at large. But how about the small to medium-size enterprises (SMEs) that account for 99 percent of companies trading in the UK today? If you’re one of those independent traders, an entrepreneur or a company owner, you’ll be keen to understand what Brexit means for small businesses like yours.
There are several implications this landmark decision might have on our economy, on enterprise and on employment. Some fear staffing shortages due to tighter immigration controls, while others are concerned with import issues. Many business leaders worry about the political uncertainty surrounding the divorce and its wider ramifications. Whereas, on the other hand, there are upsides for companies that export due to falling exchange rates. In short, though, what Brexit means for small businesses like yours will depend on who you employ, who you do business with and who you source your goods from.
Take the freedoms of movement as a starting point. This was one of the most contentious issues argued by both pro and anti-Brexit advocates. For while some people feel an influx of foreign workers is a strain on resources and, in turn, bad for our economy, the other side counter that industry and, in turn the economy itself, relies on immigrant workers.
Restricting this free movement of labour will have a negative impact on some businesses, particularly those that employ from within the EU. But a counter argument can be made that, in curtailing immigration, we provide more opportunities for UK citizens, so long as they are sufficiently skilled or have access to training. Once this all washes through, then, perhaps starting a training company might be a wise move in a post-Brexit world.
Traditionally, businesses in the licenced trade, in hospitality, in domestic care and in cleaning employ immigrant workers. Sometimes this is due to the nature of the work, the pay on offer, its shift patterns or its location. Hoteliers, publicans and coffee shop owners might well be concerned with a post-Brexit labour market. But all of those job roles will need to be filled somehow. For, whatever state the economy finds itself in, a western democracy like ours won’t last long if we can’t book a clean hotel room, enjoy a pub lunch on a Sunday or pick up a flat white on our way to work! Perhaps that is why there are so many lucrative business opportunities in the service sectors.
The other main issue surrounding the UK’s exit from the EU is the distinct possibility that we’ll witness the end of free trade. Or will we? What Brexit means for small businesses that import from and export to the EU is still unclear. And, until a decision on a hard or soft Brexit is determined, the jury is still out on its overall impact to trade.
Will importers be hit with more costs, more restraints and more bureaucracy? And what will that do to their margins and their overall consumer appeal? Or will importers have to, in the end, look to countries outside of the EU? And what about businesses that already trade outside of the EU? Won’t they see an advantage in levelling playing field across global trade? Yes, some businesses really will benefit from a weaker pound. But, in a real boost to the economy and national pride, could UK manufacturing businesses begin to see an upturn as costly imports become increasingly uncompetitive?
There are lots of unanswered questions, and nothing is certain at this point in time. What is clear, however, is that if you survey companies that already trade with Europe, the vast majority will continue to do so, whatever happens after the Brexit negotiations have finally concluded. What they would like to know, though, is how smoothly they can trade, at what cost and whether there will be any punitive restrictions put in place.
It’s fair to say that the widespread pessimism about Brexit hasn’t manifested itself in quite the way many expected. The economy is pretty buoyant, at least compared to the rest of the world. But what isn’t conducive to a strong economy is uncertainty. Most business owners would like to see progress, decisive action and the opportunity to get on with things…but we’ll have to sit tight for another year to know exactly what Brexit means for small businesses across the UK.