A recent survey of small and medium-sized enterprise (SMEs) conducted after the EU referendum has cast a shadow of doubt over pre-Brexit fears that the economy would experience a slump if the UK left the EU. In the time since the UK government triggered Article 50 of the Lisbon Treaty, the legal process which began the two-year exit period from the EU, and the effect on SMEs seems to be a lot more promising than many experts had forecast.
What We Know so FarThe immediate impact of the UK’s decision to leave the EU was a plummet in the value of the pound on the international currency markets. This drop in value seemed to confirm the worst fears of those in favour of remaining within the EU - mainly that the UK’s economy would suffer drastically from Brexit.
However, a recent survey by Company Check seems to show that SMEs are actually faring better than initially thought. 1,300 national companies took part in the survey, and the results show that Brexit has had a far less severe effect than had been predicted.
More than 50% of the companies surveyed said that Brexit has not affected their company’s performance at all, a very surprising statistic. On the other hand, 30% of the companies surveyed said that Brexit had impacted their business negatively, but, in good news for all concerned, 15% of the companies surveyed said that Brexit had actually led to an improved performance for their business.
A report conducted by Opus Energy has found that, in spite of the economic uncertainty created by Brexit, a majority of SMEs actually feel more confident about their company’s future prosperity. Of 500 SMEs surveyed, 29% said that they were more confident about their business in the post-Brexit landscape than they were beforehand. On the other hand, 22% said they now feel less confident about their company’s future chances in the market.
Brexit’s impact on business confidence is difficult to determine, as it depends on which survey you study. An alternate survey conducted by Bizdaq paints a different picture of the health of business confidence in the post-Brexit economic landscape. In this study, only 20% of the companies surveyed felt more confident about their chances of future prosperity, whereas 36% of companies surveyed were worried about what the future would bring.
Investment and Growth
Uncertainty over the UK’s future economic prosperity is the main factor behind the predicted economic slump in the post-Brexit landscape. However, uncertainty also opens new opportunities.
Business mortgage inquiries since the referendum have actually increased by approximately 75%, a sign that SMEs in the UK are performing very healthy. Moreover, SMEs are predicted to contribute 27% of total business output in the UK economy by 2020, making SMEs one of the largest and most influential components of the business sector. Growth in the SME domain only seems to be getting stronger and stronger, a clear sign that the post-Brexit UK economy will perform much more successfully than initially thought.
The Road Ahead
The post-Brexit landscape is only just beginning to take shape, and, while the picture looks brighter than initially feared, SMEs must remain vigilant to ensure they do not suffer unnecessary negative consequences from the UK’s withdrawal from the EU. UK business growth and optimism seems to be very promising, but uncertainty still abounds across the business world. To ensure you are ready for challenges that might face your business, it is important to foster growth through a variety of strategies. Adopting an enterprise resource planning (ERP) solution can help you run your entire business operations, allowing you to not only manage your data, but also improve current business processes. Through improved business analytics and optimised operations, you can be prepared for any economic uncertainties resulting from Brexit. An ERP solution can help your business overcome common industry challenges, and be the competitive edge needed in a market that is constantly changing.
Access Vision33’s ERP Selection Guide and learn the importance of choosing the right technology for your business and how it can help you become adaptive to changing market conditions in the post-Brexit business world.