In March this year, Theresa May delivered her letter to EU headquarters in Brussels to formally trigger Article 50 and begin the UK’s process of leaving the European Union. This landmark event will essentially launch the country towards the unknown and subsequently will have knock-on effects on everything from the economy to business.
However, it’s fair to say that even since the referendum itself there has been a great deal of speculation surrounding what the effects of this would actually be for small businesses. Here, we take a look at some examples of this, to shed some light on what such companies could expect.
Different Workforces
If a small business was to employ a lot of foreign workers, they may have to then invest in new UK staff or spend a great deal of time obtaining work visas. Naturally, this would be positive for companies who want to foster homegrown talent and who have already invested more in British workforces.
Increased Expenses
The general day to day running of a small business could be affected by increased expenses. Everything from the costs of materials to, rental rates and building prices, transport costs and more could rise, particularly if the pound continues to become a weaker currency.
The reverse to this is that the financial industry may see a boost as more small businesses look to advice on a variety of different aspects to help support their companies.
Impacts on Trading
According to this piece on The Guardian, the UK ‘exports to 16 countries within the EU and exports account for 25% of its turnover’; this is under the current legislations though which allow easier movement and access to goods. This will then change and the rules around trade will become stricter, possibly making trading outside of the UK more challenging for SMEs with international exports.
More Entrepreneurs
Brexit could also open up more opportunities for entrepreneurs, and depending on your viewpoint, this could be positive or negative. The benefit is that there could be more market gaps for upcoming companies to exploit as EU-based companies potentially move out of the UK. The negative for existing businesses is that there could be increased local competition to deal with and manage.
The bottom line as ever with this is we won’t know for sure until we’ve severed all ties with Europe. So far there hasn’t been any particularly major happenings, it will of course be interesting to see whether this remains the case now we have officially started negotiations.
