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Businesses are Booming as Brexit’s Looming

New research has revealed that more than two thirds of the UK’s small to medium businesses (SMEs/SMBs) have no specific plan in place to prepare their company for Brexit.  When it comes to protecting your business from the impact of the UK’s exit from the European Union, two in five SME owners disclosed that they have no confidence in the government’s ability to protect them.  However, in sharp contrast to this, a massive 77% claim to have more confidence in the future of their business compared with their confidence levels a mere 12 months ago.  Considering some of the shambolic scenes we’ve seen taking place in Parliament as the Brexit issue is hashed and rehashed again and again, this is quite amazing news!

Despite many worrying concerns about the future, both financial and administrative, here in the UK, many of our SMEs report that they have yet to experience any significant impact on their bottom line following the Brexit vote in 2016.  In fact, 87% of SME owners report that they are in the same shape, or better shape financially than they were 12 months ago. 

When asked what impact leaving the EU would have on this business, 19% of company owners expect their profit margins to decrease after Britain leaves the EU and 17% are expecting a reduction in their revenue.  This is worrying for both business owners and for the British economy in general.

When questioned about what sort of support they would like to see from government for their businesses, almost half of all business owners (45%) chose a reduction in Value Added Tax (VAT) or lower taxes.  The next most popular choices were the rolling back of austerity measures and the creation of a fund to support investment in small business, which 29% (almost a third of all SME owners) said that they would like to see a transition deal with the EU to bridge the UK’s exit.

Despite the fact that the majority of small to medium sized enterprises are failing to put firm plans in place to prepare their business for Brexit, the majority have taken some steps to futureproof their companies since Article 50 was triggered in March, 2017.  A third of businesses (32%) have increased their business development activities and more than a quarter (27%) of SMEs have decreased their fixed and/or variable costs. 

As a preparation for Brexit, 25% of small companies have increased investment recently in capital goods or technology while 20% have taken on new workers. 

Whatever your feelings about Brexit as a small business owner, it’s a situation that cannot be avoided.  Ignoring Brexit is not a Brexit strategy that will serve your business well in the uncertain future we face here in the UK as Brexit looms ever closer. 

Next week, we’ll take a closer look at some plans that you could be putting into place now to protect your business and your business assets from the effect of Brexit next year.  Don’t miss out on the valuable information you need to ensure a steady cash flow for your business, follow us on Facebook or Twitter and you’ll get notified as soon as the advice is published.