The Effect Of Brexit On SMEs

The Effect of Brexit on SMEs

Brexit is merging of the words Britain and exit. It is a short form word to signify the exit of Britain from the European Union.

UK’s vote to leave the EU was made in a referendum on 23 June 2016. The movement of goods, services, people and capital across the UK/EU borders is one big decision that has to be made when the negotiations surrounding this vote is complete.

Businesses are especially concerned about how the negotiations go because it would change how UK as whole does business. As part of the EU, UK as well as other members of EU functioned as one central trading unit which meant that there were no border checks and that they all operated under the same VAT system.

How important are SMEs to the UK Economy?
SMEs in the UK number over 5.7 million which when put in perspective mean that they amount for almost all of the private sector firms (99%) and a staggering 60% of all of UK’s private sector employment.

More statistics shows that 73% of the total private section creation in the UK is contributed by SMEs. SMEs have also gainfully employed over 2 million people since 2010. All this figures go to show just how important SMEs are to the economy of the UK.

What industries would be hit the most by Brexit?

Businesses all across the UK were thrown into a wind of uncertainty following the news of Brexit. They simply were not prepared for it. Since business most go on, many of them have had to go back to the drawing board to brainstorm strategies that would help them to avoid extreme loss while still maintaining or improving their revenue.

The fall of the Pound did not help matters as it made international investors afraid after they saw it fall lower than the amount it fell during the 2008 recession. The current dip in the Pound value is the lowest we have seen in three decades.

Almost all businesses in the UK would need to stabilize its finances before it can be able to draw in investors, whether foreign or local. There are some particular businesses or industries that would have a hard time doing that. These industries are:
Airline Sector

The “leave” vote has left airline companies based in the UK with the problem of reorganizing how they ply the European routes so that they are in accord with the new EU rules and regulations. This would be mean that the cost for fare, routes and also visa would all have to be recalculated.

Some of these UK based airlines are already facing financial difficulty as with the case with EasyJet. EasyJet which happens to be a UK based low cost airline witnessed a weakening 20% drop in its share price after the “leave” vote. This has made the board of the company think about moving its headquarters out of the UK and to an EU country.

Many other airline companies might have probably made that same decision too.

Pharmaceutical Sector

Many of the research and business carried out by UK based pharmaceuticals are not done in the UK but rather abroad in EU countries. This means that this sector engages in a lot of importation, which would cause logistical or transportation problems later in the future.

Logistics is just a small problem compared with another problem that would likely face the pharmaceutical industry in the UK. This possible problem is the uncertainty regarding what impact the Brexit rulings would have on the regulatory procedures and market agreement of drugs in the UK.

Financial Service Industry

There has been decrease in the value of shares in UK bank which has led to reduced investment banking revenues and increase in loans. For banks and other financial institutions to get there feet back on the ground, regulators have advised that a reconstruction of business processes needs to be carried out.

Barclays and the Royal Bank of Scotland were among the banks hit the hardest by the new Brexit vote which left their share prices wobbling more than 30% downwards.

Automotive Industry

The sustained growth of UK based car manufacturers over the past 10 years is about to meet a holdup with the new Brexit ruling. 1.6 million Cars are produced by UK car manufacturers on the average with only 23% of them remaining in the country. 58% of the remaining 77% are exported to EU countries.

A major player in the automotive business Toyota issued a press release where it mentioned that the British membership to the EU is best for their operations and long term competitiveness and that leaving would only cause additional business challenges.

Although these sectors are to be hit the hardest, they can still find their way around the EU referendum by building and maintaining strong relations with the EU and the countries that that make it up.

Disadvantages of Brexit on SMEs

Following the news of Brexit, many studies have been carried out to determine what effect it would have on SMEs. Among such studies was the one carried out by professor and other academics at the University of St Andrews. The aim of the study was to find out the potential effect of Brexit on small businesses.

10,000 firms were surveyed during the duration of the study. All of the firms were based in UK so that the result of the survey would adequately show the required result.

The result of the survey showed that Brexit would result in a lower volume of investment by entrepreneurs, stagnant growth, lower levels of product development, and little access to external funding as well as reduced levels of businesses becoming international among many other things.

Other many disadvantages abound for SMEs and here are some of them

  1. SMEs now have to pay Import Tax

Import tax sucks for big businesses talk less of SMEs. The thousands of SMEs in the UK would now have to pay VAT for all the goods and products that are imported from the European Union after Brexit is finalized.

Come 2020 small businesses would have to bear the burden of import cost which they don’t bear presently because the cost was is passed along the supply chain and therefore takes the pressure off them. This really is bad news for businesses that are heavily involved with EU suppliers.

What this simply means is that the cost of importing materials or goods that you use for your business would increase. It would be advisable now that entrepreneurs and business owners alike should begin looking for new local suppliers within the UK so that they can totally cut the import tax cost.

SMEs that are not making just enough profits to scale up yet need to find other avenues to save so that they can cover the new VAT costs if they have to continue business with EU suppliers.

  • SMEs are no longer guaranteed funding

In the past, funding for SMEs was available because of the European Investment Fund (EIF). Although the EIF did not directly fund SMEs, SMEs still were able to get funding through banks. Since 1994 that these funds have been available to SMEs there has been an explosion of growth experienced.

With the looming exit now, it is certain that the funding fountains would be shut down. This means that UK businesses would lose an upward a lot of investment seeing that the EIF has contributed up to £2 billion in 24 years.

This is bound to have an effect on UK’s economy because without proper funding, these businesses cannot operate well. This would also reduce the amount of startups that would commence business in the UK. New companies or startups that are determined to grow however can look to crowd source their initial investment money as a method of funding.

The UK is also looking to help out entrepreneurs with their funding troubles by providing the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) which are tax authorities that assist in promoting startup activities.

  • SMEs would experience a change in corporate tax

Corporate tax as we all know is surrounded by a lot of uncertainties. Even though there have been reports from the government claiming that corporate taxes would go down to 17 percent we cannot say whether it would happen for sure.

The uncertainty surrounding the Brexit deals is no good news for small businesses; it does give business owners to rethink how they would do business in such a manner that would still bring profits and not break any of the new rules or regulations that are sure to follow.

Opportunities that SMEs and businesses can exploit from Brexit

  • More internal investment

No business whether in the UK or anywhere else for that matter can be started without some form of capital. Capital is the core of any business. Metaphorically capital is the breath of life that is blown through the nostrils of any business.

Many SMEs however struggle with raising capital especially when they just start or are in the beginning of business. A survey carried out revealed that about 30% of SMEs in the UK found funding to be their greatest obstacle when they were just starting out. Many of these SMEs attribute the lack of funding to “unfriendly banks”. The banks have grown to be loathed by small businesses because these banks do not display the right attitudes towards them.

Following the talks of Brexit there has been a noticeable deprecation in the value of the Pound. Although many might consider this as a problem, it can actually serve to promote more internal investments which in turn allow more business to grow.

Private equity firms would now be able to pump more of their money or investment into local UK businesses. This is good because it would help to make local businesses to become solid while creating employment avenues for the UK citizens too, Win-win.

  • More Growth for UK SMEs

SMEs are usually small and flexible in nature. This makes it really simple and easy for them to adapt quickly to the instabilities of any economy unlike their bigger counterparts. Entrepreneurs and innovative business owners can see Brexit as an opportunity to grow.

The internet has also made it a lot easier to start up a business. UK business owners or those looking to just start a business need to jump on the opportunity.

  • More Exports

Taking advantage of the weakening Pounds which make products cheaper for international buyers, entrepreneurs and business owners can create an entirely new market for themselves. Even now many businesses are already taking advantage of this.

Paypal for example has revealed in a research that SMEs have seen their international sales treble because of the currency fall. Another study has shown that 25% of SMEs have actually had their international sales bolstered by the events of Brexit.

Again the internet comes in as it can help UK based businesses to grow beyond the borders and into international markets. With a solid online presence, they can create online stores where international customers can browse and pay for products in their own language and currency.

  • More UK residents get work

When UK leaves the EU entirely, we are not sure of the rule or regulations that would be at the time, but we do know that there is likely going to be a shortage of workers. A dip is expected in the number of workers in the UK as 47% of highly skilled EU citizens plan to leave the UK within the next half decade.

The exit of these EU citizens would pave the way for more local or domestic talents to be used. With the imported workforce bound to leave the country business owners now have the opportunity to turn their focus towards fillings any talent gap with skilled employees from the UK.

The business’ employee retention rate would also be helped because most people tend to commit their future to employers that allow for them to nurture and express themselves.

The outcome of Brexit cannot be entirely bad for businesses in the UK. Business owners and entrepreneurs need to continue to learn, grow and also carry their employees along with on the job training and external course too.

How can SMEs Find a Way around Brexit

Entrepreneurs and business owners in the UK need to find a way to prepare their businesses for the eventualities of Brexit. It might be hard but the preparation has to be done. Here are some ways in which entrepreneurs can prepare.

  1. Analyze and evaluate your supply chain

As a business owner you need to know how your supply chain integrates with the general market and with the rest of the European Union (EU). How exactly can you do this? Professor Michael Mayer of the University Of Bath School Of Management might have a solution for you.

Professor Michael Mayer suggests that you review your business’ sensitivity to time delays whenever you notice significant linkages. A practical example that he recommends is through bureaucratic hurdles or border check disruptions within a short period of time. Also taking a lot at your price changes and also checking to see if you are within the control limits of standard operations would help to review your supply chain.

He went further to advice that you as a business owner should review the skills and sales portfolio of your employees and prospective hires to see how the various Brexit decisions would affect it.

  • Keep your Budget tight and completely cut off controllable costs

The goal of any business is to maximize sales while minimizing expenditure, to this effect all businesses that expect to grow past the first year need to have a budget.

Entrepreneurs and small business owners do well to cut management cost as well and make it a priority to save as much as possible on controllable costs.

Say for example your business is one that relies heavily on products that are imported into the UK like fuel. Any unfavorable impact on the pound-dollar exchange rates would no doubt result in you spending more money on fuel. This is a cost that you really have no control over and for your business to continue growing you need to continue to buy fuel.

So to offset potential deficiencies in that department you need to make sure to save on the factors within your control. A budget would help you to do that effectively as a proper budget gives you an overview of all you expected expenditure and revenue at a glance.

  • Be more proactive and think ahead

It would be really unwise for you to continue to watch the news and see out the negotiations instead of planning and thinking of ways to make your business continue to grow.

Many business owners, especially the ones that have to import and export across the EU, are already concerned about how they would continue their business. Entrepreneur Jennifer Bailey who founded Calla Shoes raises a valid issue that should concern all business owners.

Although her business Calla Shoes is a UK business, the shoes are actually produced in Portugal. Jennifer talks about how entrepreneurs like her should concern themselves with how the new regulations would affect them. Changes in tariffs, border control and possible delay in importing goods are all valid reasons for concern.

She later went on to advice that businesses should build reserves so that the additional costs that the effect of UK leaving the EU would have would not come as a shock.

  • Take a second look at your workforce

Are some of your worker immigrants? It is no news that a lot SMEs rely heavily on EU workers. Brexit can change how secure these workers are though. The new rulings might leave EU employees out of work faster than they might expect.

The advice is the SMEs should run an internal audit on the immigration standing of their present employees to see how many of them might be affected by any new immigration controls that might happen.

The audit should also be able to identify the workers that are qualified to apply for settled status even though there is no guidance on the process of obtaining settled status. You as a business owner can however keep the harmony of your workforce by putting measures in place to help these employees that might have issues.

After all you need your workforce to grow and be productive in your business.

  • Utilize your data

Making sense of your data goes a long way in helping you and your business grow. With proper data analysis, you are able to detect areas where you are lacking or losing funds and therefore be able to buckle up and fix the issue early on.

Other Questions that Might arise regarding your business and Brexit are answered here:

  • When would Brexit happen?

At 11pm (BST) on 29 March 2019, the UK would officially leave the EU.

  • Would you be able to employ EU citizens post Brexit?

If the citizens you wish to employ are already working and living in the UK then you would still be able to employ them. These EU citizens however have to apply for and receive an indefinite leave to remain or a Settled status if they have lived for more than 5 years in the UK. For those that have lived in the UK under 5 years, they need to get a Pre settled status.

The status (Settled or pre settled) gives these citizens the authority to work and operate in the UK like every other person.

  • Would your business be affected by Brexit even though you sell to UK individuals but your business is based somewhere else?

There would be little or no change to the regulations that cover the importation of goods from beyond the EU after the events of Brexit. Although it is expected that new importation documents might be required and that the documents would be different for when you want to import into EU member states. There might also be an increase in importation cost.

  • How can you perform a test to access the impact of Brexit?

Businesses owners need to run an assessment test now in other to understand how much impact Brexit would have on their businesses and also put plans in place to contain any issues that might pop up.

Among the areas that should be assessed are logistics (Import and Export), manufacturing, IT, Data, Operating standards and employment services.

  • Would your business be affected even though it is UK based and serves UK customers only?

Really there is no business in the UK that would not be affected by Brexit. It could be subtle or be a really hard hit. While you might be not be able to control what effects Brexit might have on your business, it is advised that you take measures now so as not to be found lacking when the day does come.

Say for example, you might be a maintenance business that has its service exclusively to UK customers, but you might need some machine parts that are not produced in the UK. When faced with this kind of dilemma you have two choices.

The first choice is that you look for new suppliers so that any possible delays and additional cost that comes with importation might be avoided. The second choice is that you plan these delays and factor in the extra cost into your day to day business. Either way, your business is still affected.

Conclusion

There is no doubt that Brexit will affect SMEs in the UK as this article has explained and it might get hard for small businesses. However, as this article also shows there are a number of opportunities that it presents. The article also highlights some of the ways by which you can prepare for the change that is coming.

Making good use of the information can really be the difference between being at the top of the curve or at the bottom.

he Effect of Brexit on SMEs

Brexit is merging of the words Britain and exit. It is a short form word to signify the exit of Britain from the European Union.

UK’s vote to leave the EU was made in a referendum on 23 June 2016. The movement of goods, services, people and capital across the UK/EU borders is one big decision that has to be made when the negotiations surrounding this vote is complete.

Businesses are especially concerned about how the negotiations go because it would change how UK as whole does business. As part of the EU, UK as well as other members of EU functioned as one central trading unit which meant that there were no border checks and that they all operated under the same VAT system.

How important are SMEs to the UK Economy?
SMEs in the UK number over 5.7 million which when put in perspective mean that they amount for almost all of the private sector firms (99%) and a staggering 60% of all of UK’s private sector employment.

More statistics shows that 73% of the total private section creation in the UK is contributed by SMEs. SMEs have also gainfully employed over 2 million people since 2010. All this figures go to show just how important SMEs are to the economy of the UK.

What industries would be hit the most by Brexit?

Businesses all across the UK were thrown into a wind of uncertainty following the news of Brexit. They simply were not prepared for it. Since business most go on, many of them have had to go back to the drawing board to brainstorm strategies that would help them to avoid extreme loss while still maintaining or improving their revenue.

The fall of the Pound did not help matters as it made international investors afraid after they saw it fall lower than the amount it fell during the 2008 recession. The current dip in the Pound value is the lowest we have seen in three decades.

Almost all businesses in the UK would need to stabilize its finances before it can be able to draw in investors, whether foreign or local. There are some particular businesses or industries that would have a hard time doing that. These industries are:
Airline Sector

The “leave” vote has left airline companies based in the UK with the problem of reorganizing how they ply the European routes so that they are in accord with the new EU rules and regulations. This would be mean that the cost for fare, routes and also visa would all have to be recalculated.

Some of these UK based airlines are already facing financial difficulty as with the case with EasyJet. EasyJet which happens to be a UK based low cost airline witnessed a weakening 20% drop in its share price after the “leave” vote. This has made the board of the company think about moving its headquarters out of the UK and to an EU country.

Many other airline companies might have probably made that same decision too.

Pharmaceutical Sector

Many of the research and business carried out by UK based pharmaceuticals are not done in the UK but rather abroad in EU countries. This means that this sector engages in a lot of importation, which would cause logistical or transportation problems later in the future.

Logistics is just a small problem compared with another problem that would likely face the pharmaceutical industry in the UK. This possible problem is the uncertainty regarding what impact the Brexit rulings would have on the regulatory procedures and market agreement of drugs in the UK.

Financial Service Industry

There has been decrease in the value of shares in UK bank which has led to reduced investment banking revenues and increase in loans. For banks and other financial institutions to get there feet back on the ground, regulators have advised that a reconstruction of business processes needs to be carried out.

Barclays and the Royal Bank of Scotland were among the banks hit the hardest by the new Brexit vote which left their share prices wobbling more than 30% downwards.

Automotive Industry

The sustained growth of UK based car manufacturers over the past 10 years is about to meet a holdup with the new Brexit ruling. 1.6 million Cars are produced by UK car manufacturers on the average with only 23% of them remaining in the country. 58% of the remaining 77% are exported to EU countries.

A major player in the automotive business Toyota issued a press release where it mentioned that the British membership to the EU is best for their operations and long term competitiveness and that leaving would only cause additional business challenges.

Although these sectors are to be hit the hardest, they can still find their way around the EU referendum by building and maintaining strong relations with the EU and the countries that that make it up.

Disadvantages of Brexit on SMEs

Following the news of Brexit, many studies have been carried out to determine what effect it would have on SMEs. Among such studies was the one carried out by professor and other academics at the University of St Andrews. The aim of the study was to find out the potential effect of Brexit on small businesses.

10,000 firms were surveyed during the duration of the study. All of the firms were based in UK so that the result of the survey would adequately show the required result.

The result of the survey showed that Brexit would result in a lower volume of investment by entrepreneurs, stagnant growth, lower levels of product development, and little access to external funding as well as reduced levels of businesses becoming international among many other things.

Other many disadvantages abound for SMEs and here are some of them

  1. SMEs now have to pay Import Tax

Import tax sucks for big businesses talk less of SMEs. The thousands of SMEs in the UK would now have to pay VAT for all the goods and products that are imported from the European Union after Brexit is finalized.

Come 2020 small businesses would have to bear the burden of import cost which they don’t bear presently because the cost was is passed along the supply chain and therefore takes the pressure off them. This really is bad news for businesses that are heavily involved with EU suppliers.

What this simply means is that the cost of importing materials or goods that you use for your business would increase. It would be advisable now that entrepreneurs and business owners alike should begin looking for new local suppliers within the UK so that they can totally cut the import tax cost.

SMEs that are not making just enough profits to scale up yet need to find other avenues to save so that they can cover the new VAT costs if they have to continue business with EU suppliers.

  • SMEs are no longer guaranteed funding

In the past, funding for SMEs was available because of the European Investment Fund (EIF). Although the EIF did not directly fund SMEs, SMEs still were able to get funding through banks. Since 1994 that these funds have been available to SMEs there has been an explosion of growth experienced.

With the looming exit now, it is certain that the funding fountains would be shut down. This means that UK businesses would lose an upward a lot of investment seeing that the EIF has contributed up to £2 billion in 24 years.

This is bound to have an effect on UK’s economy because without proper funding, these businesses cannot operate well. This would also reduce the amount of startups that would commence business in the UK. New companies or startups that are determined to grow however can look to crowd source their initial investment money as a method of funding.

The UK is also looking to help out entrepreneurs with their funding troubles by providing the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) which are tax authorities that assist in promoting startup activities.

  • SMEs would experience a change in corporate tax

Corporate tax as we all know is surrounded by a lot of uncertainties. Even though there have been reports from the government claiming that corporate taxes would go down to 17 percent we cannot say whether it would happen for sure.

The uncertainty surrounding the Brexit deals is no good news for small businesses; it does give business owners to rethink how they would do business in such a manner that would still bring profits and not break any of the new rules or regulations that are sure to follow.

Opportunities that SMEs and businesses can exploit from Brexit

  • More internal investment

No business whether in the UK or anywhere else for that matter can be started without some form of capital. Capital is the core of any business. Metaphorically capital is the breath of life that is blown through the nostrils of any business.

Many SMEs however struggle with raising capital especially when they just start or are in the beginning of business. A survey carried out revealed that about 30% of SMEs in the UK found funding to be their greatest obstacle when they were just starting out. Many of these SMEs attribute the lack of funding to “unfriendly banks”. The banks have grown to be loathed by small businesses because these banks do not display the right attitudes towards them.

Following the talks of Brexit there has been a noticeable deprecation in the value of the Pound. Although many might consider this as a problem, it can actually serve to promote more internal investments which in turn allow more business to grow.

Private equity firms would now be able to pump more of their money or investment into local UK businesses. This is good because it would help to make local businesses to become solid while creating employment avenues for the UK citizens too, Win-win.

  • More Growth for UK SMEs

SMEs are usually small and flexible in nature. This makes it really simple and easy for them to adapt quickly to the instabilities of any economy unlike their bigger counterparts. Entrepreneurs and innovative business owners can see Brexit as an opportunity to grow.

The internet has also made it a lot easier to start up a business. UK business owners or those looking to just start a business need to jump on the opportunity.

  • More Exports

Taking advantage of the weakening Pounds which make products cheaper for international buyers, entrepreneurs and business owners can create an entirely new market for themselves. Even now many businesses are already taking advantage of this.

Paypal for example has revealed in a research that SMEs have seen their international sales treble because of the currency fall. Another study has shown that 25% of SMEs have actually had their international sales bolstered by the events of Brexit.

Again the internet comes in as it can help UK based businesses to grow beyond the borders and into international markets. With a solid online presence, they can create online stores where international customers can browse and pay for products in their own language and currency.

  • More UK residents get work

When UK leaves the EU entirely, we are not sure of the rule or regulations that would be at the time, but we do know that there is likely going to be a shortage of workers. A dip is expected in the number of workers in the UK as 47% of highly skilled EU citizens plan to leave the UK within the next half decade.

The exit of these EU citizens would pave the way for more local or domestic talents to be used. With the imported workforce bound to leave the country business owners now have the opportunity to turn their focus towards fillings any talent gap with skilled employees from the UK.

The business’ employee retention rate would also be helped because most people tend to commit their future to employers that allow for them to nurture and express themselves.

The outcome of Brexit cannot be entirely bad for businesses in the UK. Business owners and entrepreneurs need to continue to learn, grow and also carry their employees along with on the job training and external course too.

How can SMEs Find a Way around Brexit

Entrepreneurs and business owners in the UK need to find a way to prepare their businesses for the eventualities of Brexit. It might be hard but the preparation has to be done. Here are some ways in which entrepreneurs can prepare.

  1. Analyze and evaluate your supply chain

As a business owner you need to know how your supply chain integrates with the general market and with the rest of the European Union (EU). How exactly can you do this? Professor Michael Mayer of the University Of Bath School Of Management might have a solution for you.

Professor Michael Mayer suggests that you review your business’ sensitivity to time delays whenever you notice significant linkages. A practical example that he recommends is through bureaucratic hurdles or border check disruptions within a short period of time. Also taking a lot at your price changes and also checking to see if you are within the control limits of standard operations would help to review your supply chain.

He went further to advice that you as a business owner should review the skills and sales portfolio of your employees and prospective hires to see how the various Brexit decisions would affect it.

  • Keep your Budget tight and completely cut off controllable costs

The goal of any business is to maximize sales while minimizing expenditure, to this effect all businesses that expect to grow past the first year need to have a budget.

Entrepreneurs and small business owners do well to cut management cost as well and make it a priority to save as much as possible on controllable costs.

Say for example your business is one that relies heavily on products that are imported into the UK like fuel. Any unfavorable impact on the pound-dollar exchange rates would no doubt result in you spending more money on fuel. This is a cost that you really have no control over and for your business to continue growing you need to continue to buy fuel.

So to offset potential deficiencies in that department you need to make sure to save on the factors within your control. A budget would help you to do that effectively as a proper budget gives you an overview of all you expected expenditure and revenue at a glance.

  • Be more proactive and think ahead

It would be really unwise for you to continue to watch the news and see out the negotiations instead of planning and thinking of ways to make your business continue to grow.

Many business owners, especially the ones that have to import and export across the EU, are already concerned about how they would continue their business. Entrepreneur Jennifer Bailey who founded Calla Shoes raises a valid issue that should concern all business owners.

Although her business Calla Shoes is a UK business, the shoes are actually produced in Portugal. Jennifer talks about how entrepreneurs like her should concern themselves with how the new regulations would affect them. Changes in tariffs, border control and possible delay in importing goods are all valid reasons for concern.

She later went on to advice that businesses should build reserves so that the additional costs that the effect of UK leaving the EU would have would not come as a shock.

  • Take a second look at your workforce

Are some of your worker immigrants? It is no news that a lot SMEs rely heavily on EU workers. Brexit can change how secure these workers are though. The new rulings might leave EU employees out of work faster than they might expect.

The advice is the SMEs should run an internal audit on the immigration standing of their present employees to see how many of them might be affected by any new immigration controls that might happen.

The audit should also be able to identify the workers that are qualified to apply for settled status even though there is no guidance on the process of obtaining settled status. You as a business owner can however keep the harmony of your workforce by putting measures in place to help these employees that might have issues.

After all you need your workforce to grow and be productive in your business.

  • Utilize your data

Making sense of your data goes a long way in helping you and your business grow. With proper data analysis, you are able to detect areas where you are lacking or losing funds and therefore be able to buckle up and fix the issue early on.

Other Questions that Might arise regarding your business and Brexit are answered here:

  • When would Brexit happen?

At 11pm (BST) on 29 March 2019, the UK would officially leave the EU.

  • Would you be able to employ EU citizens post Brexit?

If the citizens you wish to employ are already working and living in the UK then you would still be able to employ them. These EU citizens however have to apply for and receive an indefinite leave to remain or a Settled status if they have lived for more than 5 years in the UK. For those that have lived in the UK under 5 years, they need to get a Pre settled status.

The status (Settled or pre settled) gives these citizens the authority to work and operate in the UK like every other person.

  • Would your business be affected by Brexit even though you sell to UK individuals but your business is based somewhere else?

There would be little or no change to the regulations that cover the importation of goods from beyond the EU after the events of Brexit. Although it is expected that new importation documents might be required and that the documents would be different for when you want to import into EU member states. There might also be an increase in importation cost.

  • How can you perform a test to access the impact of Brexit?

Businesses owners need to run an assessment test now in other to understand how much impact Brexit would have on their businesses and also put plans in place to contain any issues that might pop up.

Among the areas that should be assessed are logistics (Import and Export), manufacturing, IT, Data, Operating standards and employment services.

  • Would your business be affected even though it is UK based and serves UK customers only?

Really there is no business in the UK that would not be affected by Brexit. It could be subtle or be a really hard hit. While you might be not be able to control what effects Brexit might have on your business, it is advised that you take measures now so as not to be found lacking when the day does come.

Say for example, you might be a maintenance business that has its service exclusively to UK customers, but you might need some machine parts that are not produced in the UK. When faced with this kind of dilemma you have two choices.

The first choice is that you look for new suppliers so that any possible delays and additional cost that comes with importation might be avoided. The second choice is that you plan these delays and factor in the extra cost into your day to day business. Either way, your business is still affected.

Conclusion

There is no doubt that Brexit will affect SMEs in the UK as this article has explained and it might get hard for small businesses. However, as this article also shows there are a number of opportunities that it presents. The article also highlights some of the ways by which you can prepare for the change that is coming.

Making good use of the information can really be the difference between being at the top of the curve or at the bottom.