How will Brexit affect businesses?

How will Brexit affect businesses?

How will Brexit affect businesses?

A Brexit Survival Guide for Startups

Depending on who you listen to, we’re either close to a Brexit deal or a million miles away. Whatever your views are, making the right business decisions during this tumultuous time is likely to be challenging, especially if you are a small business owner or thinking of running a startup. But how will Brexit affect businesses?

The biggest conundrum that small businesses face is the whole uncertainty that surrounds Brexit. Let alone what our future trading relationship with the EU, and the rest of the world, is actually going to look like post-Brexit.

This uncertainty means that many small businesses are putting off making big decisions in their startup and playing a wait-and-see game. The longer our Brexit indecision goes on, however, the more difficult this is to maintain.

Bugger Brexit - How will Brexit affect businesses

Startups need to hit the ground running and have an impact on the market fairly quickly if they want to succeed. Holding back too much is likely to be detrimental. There are four main areas that your startup will need to focus on if it wants to survive and thrive in the current economic environment:

1. Employing Staff

Assuming we eventually get to Brexit, it’s going to have an impact on free movement. There may even be tighter immigration controls in place, not just for the EU but for the rest of the world.

Many small businesses are already struggling to attract the best talent in the current environment. It’s a two-way process, after all. Top performers are less likely to consider coming to the UK and setting up home if their future is uncertain. Then, the lower-paid overseas talent may have restrictions placed on their employment and UK small businesses are then forced to hire more expensive staff, putting a financial strain on the business.

Startups in particular need to focus on how they upskill their own, homegrown employees to deliver the support they need. Having the right recruitment strategy in place is important, for instance, as is understanding how remote workers can be used effectively to fill the gaps and boost productivity.

2. Getting Funding

Business growth generally depends on financing being available. For most startups, budgets are constrained and making sensible investment decisions is essential.

Banks are likely to survive a bad Brexit outcome but one of the first things they’ll certainly do is cut back on the financial support they provide for small businesses and startups.

Many startups over the last few years have been able to benefit from EU Structural Funds. Post-Brexit, these are not going to be available. The government has promised to partly replace this with the UK Shared Prosperity Fund to combat inequality in more run-down areas of the country, but details to date have been scant and it doesn’t apply to every new business.

Startups, therefore, have to be increasingly creative in the way they raise money, including attracting venture capital and using crowdfunding.

Get ready for Brexit - How will Brexit affect businesses3. Growing Your Startup

Economic growth has slowed down because of the Brexit delay and it’s true that the vast majority of small businesses and startups are not particularly well prepared for a negative outcome. However, the basics of growing a small business remain the same.

Having a robust strategic plan in place, understanding who your audience is as well as how to attract them, investing in profitable marketing and getting the right staff on board are still strong drivers for success. Creating homegrown markets and developing these is one way to bolster your small business from the effects of a downturn following Brexit and the potential loss of external markets.

It’s essential to understand these factors, have a clear idea of where your startup sits and where it needs to be three or four years down the line.

4. Who To Do Business With

This is problematic if you deal with companies or consumers outside of the UK. What happens if trade with the EU is stalled? How long will it take to build trade agreements with other countries? How will these deals after Brexit affect your business?

While there are no certain answers, exports to non-EU countries are a growth area. In 2018, exports reached an all-time high of £621 billion and there are plenty of opportunities out there for small businesses.

Understanding this landscape and leveraging those opportunities will be challenging for most small businesses but the startups that have a clear focus and strong business strategy in place will fair better than most. It’s a case of keeping your ear to the ground and spotting the opportunities that are going to take your startup forward.

In Summary

No one really knows how Brexit will affect businesses in the UK, but what we do know is that we need to start planning for it. The last thing we want is the country to go into a panic and small businesses in the UK suffer.

Being organised is a good habit to have, so you may as well start early!

 

 

 

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