Five post-Brexit actions for London SMEs
Brexit vote already impacting local business decisions
— Lack of political leadership a key concern of SMEs after Brexit vote —
A survey of over 800 London SMEs has found that the vote to leave the EU is already impacting their ability to make critical business decisions.
The following five key concerns are clear:
- Lack of political leadership in the UK due to the change of Prime Minister;
- Access to capital and cost of borrowing due to loss of AAA rating and government inability to reduce the deficit;
- Uncertainty about cross border trading due to uncertainty on the trading relationship with the EU;
- Inability to recruit talent due to job insecurity and brain drain of European expertise;
- Increased red tape as the Government looks to cut civil service responsibilities and pass the ever-increasing burden of compliance administration to SME owners.
The survey of 800 SMEs was undertaken by Robinsons Chartered Accountants, one of the leading SME accounting firms in London, and having seen these challenges first hand their message to London SMEs is simply not to panic.
Joseph Robinson, Managing Partner of Robinsons, said: “It is crucial to approach this period with an objective, proactive and diligent mind-set. The uncertainties brought about by Brexit are undoubtedly forcing businesses to re-assess their position but providing they look for both risks and opportunities there is no reason they won’t be able to mitigate any long-term negative effects. Seeking expert advice from their accountant or business advisor has never been so important.”
In response, the following actions are recommended for London SMEs:
- Ask for advice – Assessing your company’s financial health is the best place to start. Uncover any potential risks which you might have previously been unaware of;
- Evaluate your next steps – Had you planned on investment? If so, is it still a viable option? If not, was it an essential strategy and what alternatives are there? Know your options, however quickly they seem to change;
- Plan, plan and plan again – Contingency planning will be key to limit your exposure to fast-changing market conditions. Establish your critical levels of support within the business, i.e. at which point does action need to be taken and how should that take place?
- Revisit your recruitment strategy – Is the level of expertise you were looking for still a viable investment? Do you have the foundations to expand your workforce or is there a more suitable option?
- Review your internal procedures – Is your finance team up to date with the latest requirements from HMRC? Are you in a position to manage these in-house or would outsourcing provide more flexibility? Ensure you can react quickly and efficiently to new legislation and compliance.
“London SMEs are understandably worried about a possible slowing of economic growth but they cannot stand still. A potential lack of political decision could create a sterile business environment. In contrast, small and medium sized businesses need to proactively plan for the future.”
“Research and development and new capital investment are likely to be the first areas to suffer but scenario planning will enable businesses to trade through any resulting economic slowdown with added assurance.”
Robinsons has produced a shareable guide for SMEs to address their concerns: