Of the many discussion points Brexit has created, one of the most prevalent is how the move away from the European Union will affect small businesses. As the leaving date gets closer, we’re looking at what challenges SMEs will face and how they can counteract the effects.
What are the challenges facing SMEs?
Importing and exporting products could become more difficult post Brexit. With the UK’s possible withdrawal from the Free Market, encompassing the Customs Union and the Free Trade Agreement, it may become harder for businesses to trade with countries involved with the free movement of goods within the EU, due to the costs that may be imposed when we leave.
Possible extra export costs, plus possible changes to the exchange rates of the pound compared to the euro and other currencies, could also mean a disruption in cash flow. There may be less money for companies to spend on training, employees and growing the business.
The possible loss of workers from the EU, due to passport changes and workers coming from Europe, could also cast a shadow of doubt on the future performance of SMEs. Since there has been no official announcement from the government, SMEs are unable to predict how Brexit could influence the sizes of workforces or the number of eligible candidates for vacant positions.
What’s more, once the UK has left the EU, there may be changes made to previously EU-regulated business-related laws, such as workplace conditions or workers’ rights. Any changes made could present new challenges for SMEs to acclimatise to and companies may need to change their goals and plans to accommodate these changes.
What actions can SMEs take to accommodate these challenges?
The first action to take if you think your SME business is going to be impacted by any of these Brexit changes is to ask for some advice. It’s important to assess your company’s financial health, as a starting point, since this could be the most directly impacted area. This process will also able you to uncover any potential risks.
Evaluate the next steps in your business plan to see if they are still safe and viable, especially with regards to possible investments. Investing in a new scheme when the future is uncertain may be riskier than initially thought; if it’s not an essential strategy now, it could be delayed until things are more certain. Know what options you have available and what alternatives you would be able to implement.
Create a detailed plan, and contingency plans, to make sure that you’re able to adapt to the fast-changing market conditions easily and quickly. Having multiple plans for different situations will mean that it’s much easier to take action when you need to and to assess the levels of support your business has for each possibility.
Finally, make sure to review your internal procedures. Are you up to date with all the latest HMRC requirements and able to manage them in-house? New legislations and compliance may be introduced at a higher frequency than before Brexit so it’s important to make sure that you can react quickly and efficiently to avoid repercussions.
If you’re looking to expand your workforce before Brexit comes into effect, maybe you need an extra interim pair of hands or even someone of a fixed term contract to ensure your business is in tip top shape before big changes occur. At SF Group, we’re committed to finding the best candidates for our clients, so you can continue to be a productive as possible. If you have any questions about anything you’ve read in this article, feel free to contact us to discuss them further.