Challenges UK SMEs Face After Brexit
The UK voted to leave the EU in an historic referendum at the end of June, with huge consequences for everyone living and working in the country and the wider continent. While the UK may not have officially left the EU yet, already the decision is having somewhat of an impact upon many individuals and businesses. It is set to create a lot of challenges for SMEs in the UK in the coming months and years, which if they aren’t overcome could result in serious financial and logistical problems.
Importing and Exporting
The main way in which a lot of UK small businesses will be affected by Brexit is the impact it will have upon trade with EU countries and those further afield. A new trade deal will have to be arranged, which could increase the costs of exporting products abroad and importing back into the UK. SMEs will need to be financially prepared for such changes to avoid them coming as a shock and being damaging. It is highly unlikely that free movement of goods will remain unless there is a dramatic U-turn on Brexit.
With the potential effects upon trade for businesses, this could provide a big disruption for the cash flow of many companies. Increased importing and exporting costs would result in a reduced profit margin, meaning there would be less money to spend on employees and growing the company. Potential solutions to such a challenge could include business lending help from Ebury or restructuring your business model.
There are some worries that EU citizens without a British passport could end up having to reapply to live in the UK or face having to leave. There still hasn’t been an official line by the government to say what will happen for sure, leaving many in limbo. This affects a lot of businesses who employ EU nationals who have previously been living and working in the UK legally. It could see workforces depleted and a smaller talent market.
Along with the EU changing importing and exporting terms, trade deals and more, the UK government will likely bring in its own new business laws. Unlike in the past where the EU has had a say in business related laws, from workplace conditions to worker rights, the UK government will have full control. Any changes could present new challenges for businesses to adapt in order to abide by them.
Companies need to be financially and logistically prepared to deal with any challenges that Britain’s exit from the EU will present in the coming few years.
By Ben Barlow