What small businesses really want from Brexit

Dami is concerned about the labels on her packaging. Will she have to change the labels or the size of the pots to be compliant with new regulations after Brexit?

Tom wonders if the perishable goods that he regularly imports from Europe will be delayed at the UK border.

“If I hire new staff from the EU will they need visas to work in the UK?” asks Marcelo.

When it comes to the concerns that SMEs have about doing business in a post-Brexit Britain, Sietske de Groot, Guido Reinke and Chris MacNeil, have heard almost every permutation of question there is.

The three are part of the team involved behind Navigating Brexit for SMEs (NBS). Funded by the London Growth Hub and supported by the Mayor of London, the NBS programme is delivered by the BrexitHelp experts to provide free ‘Brexit readiness’ advice and training small and medium business owners across London.

“Many SMEs have asked us ‘when will we know what is going to happen’?” explains Sietske, who has a long career as an EU expert behind her, having represented the Federation of Small Businesses at EU level and worked on EU legislation and trade deals throughout her career.

“Their other main concern is what is going to happen with EU nationals and if there will be emergency measures or a transition period if we leave with no deal.”

Brexit Uncertainty

A recent NBS workshop in the City of London was attended by an importer who thinks he will need an export license after Brexit. He says this will take nine months, but if the current exit deadline of 31 October is met, that’s just over four months away.

That’s the sort of problem that keeps some SMEs awake at night. So what advice can the NBS team give them?

“You explain that businesses will operate in a different legal environment,” says Sietske. “They understand that and they are really working to get to grips with the Brexit issues for their business, but then they ask what happens if there is a no-deal on 31 October.”

“There are fears that costs will go up and that it may become more difficult and expensive to recruit EU nationals, there are also fears that the uncertainty and indecision will continue and that this will result in continued paralysis for business.”

Preparation, preparation, preparation

“As we leave the EU jurisdiction, we will do business in a new commercial environment, under new terms,” explains Sietske.

“We don't know yet how things are going to change but we can narrow down for each business what may change. For example, an exporter of marmalade will have to look at what may happen at the border in a no- deal scenario, and what legislation there is around marmalade that may change if it is based on EU rules, e.g. on food additives.

“We may not have certainty on these issues for a long time but the least a business can do is identify the issues that may change and look at what a worst case scenario will mean for costs.

“For service providers, you may want to watch how the validity of UK licenses will change and how you can continue to bid in EU (public) contracts as a UK company. Again, we may be a long way off discussing these things, but anticipation and definition of specific issues is key, whatever happens.”

This means that SMEs need to look at their businesses and conduct a bottom-up analysis.

Take a long and realistic look at what you offer, at market conditions, opportunities for cost-cutting, efficiency gains, repurposing existing products to meet new demands, upskilling staff and more.

The team recommend that SMEs examine their business for:

  • any weak links, be they Brexit related or not
  • hidden opportunities within the context of the current trade deal we have with the EU and build enduring relationships with partners and clients in Europe
  • new opportunities - marketplaces, sectors or product lines that may unexpectedly open up as a result of change

If you only do three things...

Chris has a ‘top three’ of things that SMEs can be doing now to prepare for the future of their business.

  1. Understand your business and be realistic around what tough decisions need to be made to help your business become more resilient.
  2. Ask your supply chain and key customer accounts what plans they have in place for Brexit.
  3. Attend a free NBS workshop. With a Q&A at the end of each seminar, a Brexit Business Planning Toolkit™ and a certificate of attendance, there are free sessions across London for all small businesses with a turn-over of less than £44m, that have been trading for over six months.

To find out more about the free sessions, or for an information pack, email LGH@BrexitHelp.net or visit https://www.growthhub.london/navigating-brexit-for-smes/.

For businesses outside of London, some Local Enterprise Partnerships and Chambers of Commerce are also providing similar free events. You can find your local Chamber of Commerce here, and your nearest Local Enterprise Partnership here.

For more information on the resources available to help small businesses navigate Brexit, take a look at the SBC repository here.

 

By Chris MacNeil and Andrea McVeigh

Chris MacNeil is Partner at BrexitHelp.net, the delivery partner for the Mayor of London / LEAP / London Growth Hub (LGH) Navigating Brexit for SMEs programme. Andrea McVeigh is BrexitHelp's Social Media and Communications Manager.