The end of October is getting closer and it seems like the only topic on everyone’s lips right now is the imminent reality of Brexit.
As it stands, the UK is scheduled to leave the European Union on 31st October. Many leading economists, financial experts and large businesses are warning that a “no-deal” scenario could have a damaging impact on the UK in general. However, hardly any views have been sought on how Brexit will affect the country’s small business sector. With more than five million small businesses currently operating in the UK, this is a huge part of the economy that is being under-represented.
To address this, we decided to ask more than 1,000 small business owners just what they think about Brexit and how it might impact their businesses. Here’s what we discovered:
Small businesses are split over the impact of Brexit
The majority of people we surveyed (61%) said that they believe that the economy will be negatively affected by Brexit. However, the outlook wasn’t universally gloomy. We found that one in nine small business owners (11%) believe that Brexit will have a positive economic effect on the UK, while a fifth (22%) said that they don’t know what the impact will be.
Half of respondents (53%) said they do not believe that any positive outcomes will arise from Brexit but the remaining 47% highlighted a number of outcomes that they believe will be beneficial once the UK leaves the EU. Around a fifth (18%) said that financial and legislative independence will be the main positive impact of Brexit, while one in ten (10%) said the biggest benefit will be less red tape and fewer regulations for small businesses to comply with.
Most people haven’t prepared for it
Perhaps one of the most surprising takeaways from our research is how few business owners have prepared for a post-Brexit future. Nearly two thirds (64%) said that they have not yet made any changes or plans as a result of Brexit. Meanwhile, we found that 16% of small business owners have considered returning to employment because of Brexit, while 12% have reevaluated their retirement plans. 10% said that they have had to cut back on their hiring or growth plans, while 9% said that they have considered scaling down their business because of Brexit. A further 10% said that Brexit has made them consider closing their business altogether.
It’s not all negative
When it comes to trading in a post-Brexit world, our research revealed that many small business owners feel that they’re likely to escape any serious consequences. Just 4% of respondents said that they have had to - or will need to - find new European trading opportunities to replace ones lost because of Brexit. And only 5% said that they would have to find new trading opportunities in the UK.
Interestingly, it seems that Brexit isn’t dampening the ambitions of UK small business owners. When asked which countries they would like to explore trade and growth opportunities with over the next decade, 60% of respondents said they would look at nations in the European Union. In contrast, 40% said they would like to trade or grow into the United States, while 30% said they would like to explore opportunities with non-EU countries.
Standing up for small business
These insights from over 1,000 of the UK’s small business owners are incredibly valuable and we didn’t want to keep them to ourselves! In order to spread the word, we arranged a panel event in London to reveal our findings. Together with Royal Bank of Scotland, IPSE and the Federation of Small Businesses - along with one of our small business customers and one of our FreeAgent accountant partners - we discussed how UK small business owners feel about Brexit and how they can be better supported through these times of change.
Here are some of the highlights from the discussion: