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How the Brexit Vote Has Impacted Small Businesses in the Short Term

A lot has been predicted and debated in regards to Brexit in the UK. The main point that has been debated, at length, is how we will be effected when we leave the EU. However there has not been as much coverage about the realities of how the vote has impacted small businesses in the period we are situated within, between having voted Brexit and leaving the EU. Three major aspects that are affecting small businesses now can be seen below:

 

Recruitment

There was a great deal argued on both sides of the Brexit argument about immigration. While setting aside the merits and drawbacks, one thing that was clear on the agenda with a vote for Brexit would mean the end to free movement from the EU. However this is not the case until article 50 is enacted, (possibly later considering exit negotiations will happen over two year period) so what is the current scenario for small businesses? Having spoken to Bluerock Healthcare a small business focused on the recruitment of Healthcare staff such as nurses, who recruit a good proportion from the EU, it seems not much has changed. While there were predictions that the impending Brexit would drive more people to join the UK before Brexit this seems to have been unfounded. Equally the idea that people from the EU would shun the UK for their vote, also appears to be unfounded. The director of Bluerock reported that numbers pre and post vote were relatively similar. So for now it seems recruitment is unchanged for small businesses.

 

Exporting and Importing

One of the big stories coming out of the Brexit vote was the fall in the value of sterling. While many British people lamented the fact their summer holidays had become much more expensive, the impact on small businesses depended on what industry you were in. Many exporters found that they had become much cheaper, essentially overnight. This has led to higher sales for many exporters selling to different areas, due to their increased competitiveness. On the other side of that coin there has been a number of small businesses that have been negatively impacted by increasing costs. A lot of small businesses import a great deal from the EU so they have seen all of their costs increase. Some businesses will be able to pass this onto consumers, there will however be an inevitable impact on these small businesses.

 

Funding

Many small businesses have received funding from different EU schemes. While most of this funding will continue until the enactment of article 50 there have been cases of pre-emptive action such as outlined by Cerys Ashley in an interview with the telegraph. While the funding is still there in this case the fear of funding cuts has made some people take action. However it seems that this is a minority and most companies are continuing with funding so little has changed. Many small businesses will be looking for particular assurances for their funding from the British government.

Hence essentially the initial impact has not been as negative as predicted by some in the debate. However it is worth noting that things can change dramatically in the coming weeks as we approach Brexit. The main takeaway is like with most major changes some small businesses have been positively impacted others particularly negatively impacted. The hope will be that small business is put at the forefront of all Brexit negotiations.

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