By | Hayley Powell | Specialist in Brexit and British Naturalisation
Britain is still in a state of recovery after the shock decision to leave the EU. As the UK leads up to the their exit from the European Union, it’s become evident that entrepreneurs and business owners are uneasy, as they call to action. With no real certainty of what will happen to the economy and trading partners post Brexit, the nation is going into crisis mode.
As a small business owner, it can be difficult to remain relevant and to become the best within your field, as the markets for pretty much every single business are over-saturated with the same kind of companies, offering the same kind of product of service as yourself. With the added uncertainty of the future of the economy, overseas business relationships and everything in between, these next few months are going to be somewhat pressurized and intensified further.
The future of trade:
It has been announced that Britain will be out on the bloc by March 2019, which comes with the hopes of having a clean break. Britain is in a state of uncertainty, and all aspects of the new policies are yet to be revealed. As a small business owner, this can become extremely worrying, and overseas companies and trading partners are reassessing their long-term investments in Britain, due to economic uncertainty. Additionally, Britain and the EU are currently in talks about what will happen to EU citizens who are working in the UK, which could shake the very foundations of a small business.
After the referendum in June 2016, the pound plummeted to the lowest it has been in 31 years against the dollar and every political announcement since then has followed suit. The aftermath of the referendum showed an insight into the potential conditions of the economic climate when Britain becomes completely separate from the European Union, mutual funds dependent on Britain’s property sector became well aware of this harsh reality when they had to block panicked investors from withdrawing their cash at the same time.
Opportunity or threat?
A recent survey revealed that small business owners and startups feel more confident in their own success after Brexit, than they ever have before, but are equally pessimistic for the future of their industry in a more general sense. As the pound weakens, UK small businesses are taking advantage of international trade in order to increase their overseas sales, and more and more small business owners say that they feel confident with doing business overseas. Although this is idealistic in the short term, it’s important to question how beneficial this will be in the long term. The decrease in the pound could be an idealistic way to partake in overseas business, but as the pound begins to drop, it could see the withdrawal of overseas investors and a loss of confidence in British trade (as displayed after the referendum decision).
With overseas trade currently in a good position for small businesses, what does the referendum mean for UK trade and small businesses who solely reside within the UK?
One of the biggest concerns for small business owners at the moment is the inflation that has come with the decrease in the pound. Increasing prices of products and services could see small businesses at a loss to their global competitors. A recent survey saw that almost 50% of small business owners had raised the price of their goods or services in the last year in order to continue making a profit, and all agrees that the weak pound is the reason for doing so.
The move to global trade:
With the internal UK business market reaching hostilities, lots of small businesses are broadening their horizons and choosing to participate within global trade. This is due to the declining of sales of goods and services, as customers and clients take advantage of the cheaper or more affordable prices of global competitors. Exporting and selling goods is again a short term solution for revenue, as trading laws and policies are yet to be established as Britain finalizes their leave from the EU. It seems that these are turbulent times for small business owners, and it’s important to remain receptive and able to adapt in the changing times. It would be a fool’s errand to become a UK small business owner, fully supplemented and dependent on global trade, at a time when global trading and EU trading policies are being reestablished in the UK.
About the Author :
Hayley Powell is an avid writer who specialises in Brexit and British Naturalisation, and aims to share her knowledge with UK small business in the lead up to Britain’s exit from the EU.