Unsurprisingly, large businesses which benefit from EU trading will be shaken by the recent vote to leave the European Union, but what about the small businesses?
Brexit is about to change the UK beyond recognition, whether that’s for the better or the worse. With every article that’s released, it becomes more and more difficult to separate facts from speculation. So let’s focus on one little part of Brexit’s impact: how will it affect small businesses?
Our goal today is to provide you with an unbiased list of pros and cons of the changing economy, so you can work out for yourself where your business will stand when the air clears and the process of withdrawal is over.
Brexit and Business: Pros and Cons
PRO: Freedom from trade regulations.
Some trade regulations implemented by the EU could be seen as a burden on British business, especially in areas such as food. With independence from the EU, the British government will be able to loosen these regulations, freeing businesses up for trade which would otherwise have been unavailable. The EU has also enforced a number of regulations for ecommerce websites and online trading in general, which the UK will now be able to alter for its own companies, allowing you to make the most of your website and the internet as a trading platform.
CON: Departure from the EU’s single market.
The European Union exists as a single marketplace, with no tariffs imposed on trade between member states. As a result, as a member of the EU, more than 50% of our recent exports have gone to other EU countries, trade which will now be more difficult. Our EU membership has also meant that we have had input into the drawing up of trading rules, an influence which the UK will now lose.
PRO: Access to other global markets
Upon activating Article 50 the British government will need to quickly move to secure trade agreements with the EU and elsewhere to ensure minimal disruption of the economy. Free of EU restrictions, a Brexit Britain could secure greater access to American and Asian markets, which creates opportunities for businesses that export goods abroad. Making use of the internet to penetrate these markets will be essential.
CON: Economic uncertainty
In the aftermath of Leave’s referendum victory, global stock markets have been in a state of flux. Overseas investors are reconsidering deals with British companies while they wait out the economic uncertainty of Brexit. Depending on the nature of your business, this could affect you massively. Many of the UK’s construction, energy and research projects are invested in by overseas entities, including the EU itself. It is uncertain how much of this investment will remain should the British government enact Article 50.
PRO: Greater recruitment opportunities.
Our departure from the EU may potentially give you the chance to select new employees from a wider selection of talents. As a result of our obligation to allow freedom of movement to individuals from EU countries, our government enforced severe regulations on the immigration of non-EU individuals. With the new power of limiting EU migration, possibly with an ‘Australian style’ points system, the government will be free once again to welcome talent from outside the EU, granting a much wider staff pool access to the UK.
CON: Potential changes to workers’ rights
As a result of our EU membership, workers in the UK have enjoyed a number of rights which have been protected by constitution. With Brexit, the government will potentially have the option to remove or modify workers’ rights to:
- break times and regulated working hours;
- a minimum of four weeks of annual leave;
- four months of paid maternity leave and added protection surrounding pregnancy;
- protection from discrimination on the grounds of ethnicity, beliefs, age, sexual orientation, disability, religion or race;
- protection of workers when a company changes ownership.
It’s debatable whether these changes amount to a ‘con’ from purely a business perspective, as there will most likely be fewer guarantees business owners will have to provide, which will often benefit smaller businesses. It does mean however that there is risk of demoralising workers and creating job insecurity, will which invariably hurt the economy as spending decreases.
PRO: Freedom from other EU regulations.
With our withdrawal from the EU, we can regain control over certain regulations which have been enforced on our businesses, such as employment laws and health and safety. Many small businesses favour this regained control.
CON: The pound’s decreasing value.
Already, since leaving the EU, the pound’s value has plummeted. This change has the potential to make exports more competitive, while making imports more expensive. Although this could be seen as a slight advantage, perhaps directing people to UK businesses rather than EU alternatives, one must remember than many of the businesses and services we rely on, including many servers and web hosting companies, are set up abroad.
Hopefully, this will have cleared up some confusion over the potential impact of Brexit on your business. It is a change which will have numerous advantages and disadvantages, so the way in which your business will be affected will come down entirely to the precise nature of your business and your ability to adapt. There is certainly the potential for opportunity if the government enacts Article 50, and forward-thinking businesses will have the chance to capitalise on massive changes to the British economy.
If you have any views or if there’s something we’ve missed that’s affecting your business, please leave a comment below.