Theresa May triggered Article 50 on 29 March, starting the two-year process of the UK's withdrawal from the European Union.
We've entered into an age of uncertainty – but SMEs can't put growth plans on hold and adopt a 'wait and see' approach. Business continues as usual. Stock markets and inflation are holding steady, and Treasury predictions for growth remain the same as before the referendum.
SmallBusiness.co.uk says: "Small businesses are the lifeblood of the UK economy. Falling GDP will have a large impact on small businesses in terms of the overall activity of businesses and consumers buying their products or services...Small businesses are also more susceptible to shocks since they generally have a lower field of operation."
- Buying goods and services from other countries is now more costly. A weak pound is bad for the UK since we buy more from overseas than we sell
- If prices rise faster than wages, consumers will start to spend less
- Tariff-free trade with EU countries accounts for 44% of UK exports, so the cost of doing business with these clients has increased
The right of EU nationals to live and work in the UK is unclear, which may drive recruitment of UK workers and increased labour costs.
The Adviser Lounge warns: "If the cost of hiring skilled labour increases, the financial cost of Brexit to small business could prove too much to bear."
Brexit undoubtedly brings threats, but it also presents opportunities.
Felicia Meyerowtiz-Singh, CEO and co-founder of Akoni says: " Brexit and uncertainty also provide opportunities for revenue and business growth for UK business."
- Exporters are already benefiting from the fall in the value of the pound against the dollar and euro
- The UK tourism industry should benefit, with an increase in staycations and visitors from overseas
- Some employers anticipate potential relaxation of EU employment laws
So what can you do?
The world is changing faster than ever, with a combination of the digital revolution and economic uncertainty.
Here are some tips from the Akoni team.
- It's easier for small organisations to remain flexible and adaptable. Demonstrate agile leadership and become comfortable with uncertainty and change. Don't worry about what you can't control, but plan for relevant risks that you can mitigate.
- Streamline your systems and processes, such as the internal flow of information.
- Identify the skill sets and attitudes you need, and train your people accordingly.
- Maintain focus on customer satisfaction, monitoring social sentiment and improving your value proposition and customer journey.
- Make use of new technology such as the cloud. Monitor data for trends and use it as a guide to threats and opportunities. Turn data into visuals that can be easily analysed and transformed into good decisions and useful outcomes.
- With a grasp of core financials, the CFO plays a key role of oversight, guiding the business in the right direction both short-term and long-term.
And finally, here are some ideas from other sources:
HSBC suggests: "We will need to improve in an area in which we have consistently under-performed: supplying the world's fastest-growing economies in Asia and Latin America."
SmallBusiness.co.uk says: "Small business should be looking to do everything they can now to protect themselves from future shocks... Diversifying out of, or into different markets might make sense...and now is the time to open dialogue with suppliers about pricing."
Real Business advises: "By developing employees, you’ll have a more confident, motivated and proactive workforce who feel more positive about the future, and who are better placed to handle whatever comes along...Review your operation and pinpoint there there may be the opportunity to work with other similar-sized businesses who are experts in their field...Be as transparent as possible and involve staff in updates about the business where appropriate. This will foster strength and build trust amongst the team, which will be invaluable if the business hits any bumps further down the road."
Change is here to stay. Whatever happens, Akoni will be here to help and advise.
Akoni helps businesses make the most of their cash. Register for free at AkoniHub.com