“Right now, British politics is as clear as the darkest depths of the Atlantic Ocean.”
Those are the words of Tony Barber of The Financial Times of London. As the rest of the world exploits the benefits of globalisation, Britain has opted to regain sovereignty over its laws and borders.
Grim predictions are rife with a looming Brexit as covered in financial news. Uncertainty continues to dominate British hearts, but is it really all doom and gloom? Are there any opportunities for small businesses post-Brexit, especially in 2019?
Leaders in economics, government groups, and top corporate personalities remain divided over the potential implications of Brexit on UK small businesses. Why does this matter anyway?
SMEs are vital to the sustenance of the British economy. They make up at least 99.3% of private sector businesses with a combined turnover of £2.0 trillion. Without a doubt, challenges will come but the disaster that Brexit was predicted by many to be, has not happened.
Brexit holds an avalanche of huge opportunities for small businesses, something that many commentators pay no attention to. Some of the opportunities which small businesses can take advantage of include:
Opportunities to expand into foreign markets
Brexit has provided an atmosphere for fluctuating exchange rates. This means British goods and services are now an option for international consumers. While for businesses already serving international markets, this implies increased export opportunities.
Around a quarter of all SMEs will report improved generous returns post-Brexit. Research by PayPal, the cross-border payments giant, reveals SMEs saw international sales increase 300%on the basis of the post-Brexit currency slump. Thus, leaving the EU could make foreign markets attractive to small businesses in the UK.
A British pound sterling that has taken a beating is likely the reason many UK businesses will access a previously-inaccessible customer base. To signal their readiness to engage this vast crop of buyers, businesses can internationalise their websites, social media, and offer the ability to receive payments in local currency.
Making the most of Brexit means Brexit will pay particular attention to the outcome of negotiations, especially access to a single market. Neil Harris, CFO of EA Technology Limited, told Grant Thornton that withholding tax is the biggest inhibitor in many countries. The lack of mitigation through effective double tax treaties makes the prospect of trade deals with more dynamic non-EU markets mouthwatering.
Then India, China and growing portions of Africa are posting strong growth rates [despite recent negatives]. Britain can look to benefit from some of these markets. To quench any concerns about it, as a member of the European Free Trade Association, the UK can still enjoy any benefits of the EU’s internal market. This is definitely the best of both worlds.
Rousing opportunities for business
It is easy, if not convenient, to say Brexit is a crisis. But, massive growth opportunities will be a ready reward for businesses that anticipate it and prepare for such boom times. Regardless of the full extent of the implications of Brexit on Britain, or how uncertain the business ecosystem promises to be in a year’s time, businesses cannot afford to remain dissuaded.
Businesses and entrepreneurs must become proactive, by planning and making the most of the growth opportunities that will surely flood our climes. Britain owes its greatness to an undying entrepreneurial spirit we need now more than ever if we will thrive in a post-Brexit Britain.
Improved job market for skilled domestic workers
Upon divorce from the EU, some predict employment will be hit with a talent crisis. The UK will experience a shortfall in skilled workers post-Brexit and 47% of highly skilled EU citizens practising their profession in the UK are likely to exit the country within the five years post-Brexit. Can businesses be optimistic about this? Absolutely!
This will gift us an opportunity for local growth. A shortfall in foreign workforce gives room for small businesses to enhance their in-house programmes. The goal will be simple: fill talent gaps with skilled locals. In a short while, these workers might even be ripe enough to undertake international assignments.
Staff appear more likely to commit their future to a company that encourages growth and aggressively considers opportunities for their advancement. Thus investing in the existing workforce is cheaper long-term as it plugs skills gap on a wider scale and will enhance employee retention rates. Companies that foster a culture of continuous learning across the board have a huge potential for growth.
Thus, staff must improve their skills to fill immediate knowledge gaps, while their learning is actively driven through external courses and hands-on training.
SMEs struggle with raising capital, regardless of the country or continent. To raise capital [especially in the early stages], small businesses have to be ingenious and recent research shows close to 33% of UK small businesses consider raising capital to be the biggest obstacle to starting a new venture.
Banks have been traditionally averse to assisting fledgling companies, primarily because of perceived risk, and over 50% of SMEs describe banks as unfriendly to businesses. Alternative capital providers will look to exploit far-reaching opportunities in the SME climate.
Alternative funding solutions such as GapCa are funded by non-traditional meaning keeping them immune to the fiscal disadvantages of Brexit. They will keep offering fast, short-term secured access to finance just when and where it is needed. Visa UK’s research sees this as a revival of the high street retail economy.
The depreciation of the pound can influence banks to consider massive inward investment, creating uncharted avenues for growth. A weaker pound means private equity firms will invest much more in UK companies, protecting local businesses and jobs. For instance, Isher Capital has unveiled plans to invest £20 million in contact centre acquisition across the UK. At least 1,500 jobs will be created and secured over the next expansion phase.
It may be an economic downturn, but another key positive is the growth entrepreneurs and enterprise can experience.Financial instability has often exposed great examples of financial genius as operations become leaner and more agile than in larger operations. Companies understand the importance of lean resource management and capturing customer loyalty to maintain excellent fiscal shape.
One expects a smaller company to adapt more easily to the effects of market forces. A new business under the current economic climate will require grit, energy, commitment, and courage, but the virtual opportunity created by the world wide web is a priceless reward. Such a competitive advantage has made it easy to interact with an international customer base.
Brexit remains a thorny issue. The effects are thornier but businesses can make the most of the situation if they are well prepared.