What does a post-Brexit world mean for SMEs?
Today marks the one year countdown until the UK officially leaves the EU. And with the Brexit divorce progressing day-by-day, it’s only natural for business owners to feel uncertain about the future.
SMEs account for almost half of the UK’s private sector turnover and more than 60% of private sector employment. With that in mind, the UK’s economic stability and growth are highly dependent on SMEs, so now is potentially a time for SMEs to prosper. In a landscape of unfamiliarity and uncertainty, we must embrace the opportunities and prepare for the risks.
Suren Thiru, Head of Economics and Business Finance at British Chamber of Commerce has explained that two-thirds of businesses aren’t preparing for Brexit because it’s hard to prepare for 5 or 6 possible outcomes.
Uncertainties around immigration, tariffs and taxes are yet to be ironed out, and SMEs are facing little surety around staff, supply and finances. In other words, we can’t be certain of the future, but the Vice President of business development for Nationbuilder, believes that these are things SMEs are equipped to deal with.
Business confidence has undoubtedly taken a hit in recent months, due to fluxes in the pace of growth. While this can’t be entirely attributed to Brexit, the Guardian reports mounting concerns over Brexit, particularly amongst service providers facing higher costs and limited sales.
However, the ‘wait and see’ approach simply isn’t an adequate strategy ahead of the divorce. With proper planning and preparation, SMEs can embrace the changes ahead and learn to use them to their advantages.
Management Today puts it down to three strategies: management, leadership and proactiveness.
Most of the issues Brexit will create will be managerial. So businesses need to be proactive in preparation and ensure management tackle a wider strategy. For example, it is easy for businesses to sell to markets on their doorstep, but domestic markets will become volatile, which is why international trade is being encouraged post-Brexit.
The drop in sterling has made British goods and services more attractive and affordable to international customers, which makes this time a window of opportunity for those considering an international export strategy.
The onus here is arguably on leaders. By leaders taking an optimistic stance and reassuring teams that this is an opportunity rather than a risk, team commitment and motivation can be salvaged. But they will need to take a step back and be proactive, by devising a plan that takes into account all of the risks and opportunities that come with Brexit.
It’s no use communicating confidence to employees if it is under false pretences. People respect the truth, so by leaders being honest and transparent with their workforces, concerns can be mitigated, and opportunities met, and the steadfast nature of our SMEs will continue to prosper.
Most of the media focus has been on larger, more lucrative businesses, but SMEs can embrace Brexit as an opportunity. It’s simply down to leadership taking action and prioritising proactivity, productivity, and planning. UK businesses tend to be adaptable and innovative when confronted with challenges and opportunity, something we have proven following previous periods of volatility and unfamiliarity.
SMEs bosses might wish to prepare by focusing on improving productivity in existing operations. For example, offering performance-related bonuses and incentives, or introducing flexible working initiatives. Anything that increases the job satisfaction of employees is said to increase productivity, so are there areas you can potentially look at adjusting?
Taking initiative in these early stages will bring rewards at a later date. Brexit has the potential harm employee engagement and commitment; the kind of issues that tend to linger long after they’ve been remedied. High staff turnover can be detrimental to many areas of a business. By focusing on culture, employee satisfaction and communicating in a transparent and honest manner, employee respect and motivation can be maintained in this time of uncertainty. What it comes down to is trust, and if employees feel safe in an unfamiliar, potentially volatile climate, they’ll show their appreciation through hard work and loyalty.