Queen Approves Brexit: What’s the Impact of Brexit on Small Business?
It’s January 23, 2020. Roughly four years after the saga called Brexit has begun. It seems like the finale is about to begin. But what will the impact of Brexit on small business be? Moreover, how can companies prepare for Brexit?
With SMEs making nearly 90% of all businesses in the country we couldn’t help but wonder how that will affect them. Furthermore, they employ more than 60% of the population and have created 2 million jobs since 2010. Undoubtedly, they are the backbone of the economy.
Cutting down free trade and movement of employees with EU countries will most certainly have the biggest Brexit effect on small businesses. But what are some of the other issues we should be aware of in order to get ready for Brexit and make sure our business doesn’t draw the shortest straw?
Brexit Pros and Cons for SMEs
You may have voted “Yes” or “No” at the referendum, we all have our beliefs and political views. However, that doesn’t change the the list of advantages and disadvantages of Brexit and make them any less real. Some of them will have severe impacts, some will improve the UK’s current state.
Let’s review them.
This effect of Brexit on small businesses can turn out to be either good or bad. How so?
Well, by leaving the EU three million jobs will be lost. Moreover, reduced immigration will likely create a shortage of talent pool. The most skillful staff from the continent will have many obstacles to overcome in order to come and work in the UK. Regulations will certainly be stricker.
On the other hand, this can turn out to be one of the advantages of leaving the EU. With immigrants going through the exit door, those who remain on the island will have better chances of finding a job. Because of that, wages are expected to rise too.
As we are saying goodbye to the current benefits that the UK reaps of the tariff free trading with the EU, we can expect to greet increased trade costs. With more than 50% of our exports going to the continents that will be a huge blow for the economy. New cross-border cost will be introduced, as well as stiff regulatory constraints.
On the other hand, small businesses that have never exported or imported from the EU will finally be relieved from the burdensome costs imposed by the EU membership.
In time, these losses can be compensated by making our own trading agreements with other economically booming regions in the world.
For starters, EU innovation and support funds for SMEs will be gone completely. Financial uncertainty may be one of the biggest disadvantages of Brexit imposed on UK entrepreneurs.
Less demand for UK goods would probably trigger a decrease in innovation and investments too. Speaking of investments, London will possibly end up losing its title as the world’s capital of banks. Since the referendum, many banks and investment houses have established bases in continental EU which is a sign they’ll be the first leaving the sinking boat.
Brexit Advice for Small Businesses
For now, it looks like Brexit and business are not really a good couple. However, since there’s nothing we can do to avoid the UK leaving the EU, we might as well prepare a business Brexit checklist and an emergency plan to go with it. This way, we can secure a smoother transition for our businesses and minimise potential losses.
One way to make sure you can have a seamless collaboration with companies from around the world, regardless of the Brexit mess, is to join Enterprise League. As a member of the online business club you will enjoy the benefits of connecting with companies from 5 continents and over 40 industries. The political barrier simply doesn’t exist here. We all speak one language and strive towards growth.
Let’s join our forces and beat the odds of Brexit.
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