20th July 2016
“The times, they are a’changing”
Small businesses are not known for resilience in troubled times. The recent Brexit decision represents one of the biggest changes ever to occur in the UK, the result of which could lead to trouble. Changing times can bring exciting new opportunities for businesses who are prepared to adapt, or tragedy for those that fail to move with the winds of change. In our latest blog, we take a look at some of the issues impacting small businesses.
Uncertainty in the marketplace
Uncertainty is a constant backdrop to the current climate, as both business leaders and politicians scramble to come up with a plan for leaving the EU. While the Bank of England has a “clear plan” to keep us solvent as the pound continues to fall, when trust in economies begins to waver, so does trust in enterprise. While low interest rates make borrowing for cheaper, a weak currency will hit the bottom lines of businesses and discourage external investment.
Over the next two years, as we commit to leaving the EU, changes will be made to employment regulations. This may impact the availability of highly skilled labour, as we leave an open-bordered employment market. Many small businesses in the UK hire workers from the EU, whose futures are currently uncertain. If there are higher restrictions on EU employees working for UK companies, new businesses may struggle to find the expertise they need to thrive.
Protecting business contracts
Many SMEs have written contracts with distributors, suppliers, and agents. These contracts may have EU-wide operation. It’s important to consider whether future Brexit changes would affect the operation or performance of contracts. One example is that EU law celebrates the principle of freedom of movement of goods without import duties or equivalent. Over time we can reasonably expect tax, duties or equivalent charges – this may make the supply of goods less economically viable, both importing and exporting.
Protecting your IP
Certain types of intellectual property are currently protected through EU directives (e.g. the community trade mark). In order to keep these protections in place, the UK will have to embrace these directives within UK law. Another concern is that Britain might miss out on any future unitary patent regime that the EU intends to carry out. The unitary patent would mean that IP protection across the EU would be covered through a single application, a single fee and a single court. Many small business start-ups are born from one person’s great idea that deserves to be protected under law.
Despite finally knowing the result of the referendum, the Brexit has only resulted in more questions being asked as those in power failed to have a contingency plan. Small businesses must be mindful of any legislative changes that will come, and be flexible and streamlined enough to weather the storm of a devalued currency.
While they may not have the collateral to weather a storm like big businesses can, small businesses do have the flexibility and adaptability to respond to change. In such uncertain times as these, this is more important than ever. Businesses will need to learn to adapt or die. Whether this means streamlining processes, reviewing structures or direction will depend on the business. The key is to be flexible and make sure that your business is as lean and efficient as possible.