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Dealing With Instability: The Great Brexit SWOT Analysis

The danger with ongoing political stories – regardless of how much they affect you personally – is that there can come a point where you start to switch off from the headlines and rhetoric.

Usually, because there’s nothing much new to say.

Brexit, for me, is one of those stories.

Just after the results were announced I was eagerly seeking out news about how this would affect me and my business. But now, over a year on, and no real guarantees in the bag? Well, I’ll admit it’s harder to maintain interest when nothing is certain.

But it’s an important issue for the likes of you and me. The entrepreneurs and sole traders. The SME owners. The businesses most vulnerable to massive political, economic and social upheaval. And when we asked over 800 small business owners how Brexit had affected them one year on, the impact was clear.

But is it clear to you?

If not, here’s a SWOT analysis of the situation, based on what we know right now…

 

Strengths

  • Small businesses are more easily adaptable. We’ve less infrastructure and reliance on systems than large corporations and can be agile and fast in response to change.
  • Entrepreneurial spirit seeks opportunities. There are always winners and losers in economic uncertainty and downtimes… entrepreneurs are notorious for maximising the opportunities and have a keen nose for sniffing them out.
  • We’re a keep calm and carry on nation. And whilst it may be cliché, we Brits do get on with things and pull together in times of need. I suspect the business community will pull together even more to share knowledge and resource.

Weaknesses 

  • Uncertainty makes it hard to make decisions. It’s even more important for you as the business owner to weigh up the risks of any business decisions. Whilst there are many opportunities, there are few guarantees and fortune doesn’t always favour the brave.
  • Your staff may be affected. Especially if you hire EU citizens who, come the end of negotiations, may leave the UK, leaving you with a personnel issue that could take time to resolve.
  • SMEs are vulnerable to cash-flow issues. If you’ve yet to make provisions for a reduction in lending and funding, or an increase in interest rates, now is the time to bolster your financial defences. And with price rises for imported goods set to soar even further, it’s a fact that doing business is going to cost more.

More uncertainty has stopped our business trying to expand. We have many customers in Europe and we don’t know how that will affect our relationship with them. 

SME owner from Informi research

Opportunities

  • Businesses who export goods have seen greater returns thanks to the almost 15% dip in the pound’s value since the vote. If you’ve yet to consider exporting, now could be a great time to start – though a focus on non-EU countries is advised.
  • Ability to trade with non-EU countries may increase. As exporters turn away from the EU market (and it’s extremely likely this area of trade will be massively impacted in Brexit negotiations) more businesses are looking to non-EU countries to trade with, opening up the market.
  • No more EU red tape. One of the biggest opportunities facing businesses is that the 19,000 EU rules and regs will be abolished or tailored to British businesses under UK Government’s control  – great news if your business is hindered by unnecessary rules.

Threats

  • Recruitment could be a real headache. Many UK businesses hire skilled and unskilled workers from the EU, yet there are no guarantees they can, or will want, to stay working in the UK. This raises the pressure on business owners to find workers from the UK or non-EU countries.
  • Consumer spending is showing signs of slowing. This is frequently attributed to increased inflation thanks to the falling pound. If you rely on UK consumer spending (which has also propped up the UK economy of late), you could face a significant financial downturn in your business.
  • Access to funding may be significantly reduced. Banking access may be restricted post-Brexit, and the cost implications of making changes to your business banking and finance could impact cash-flow, profits, and growth. Unless you make plans now.

 

How do you feel about Brexit’s impact on your business? Do you agree with the strengths, weaknesses, opportunities are threats identified here, or is your business experiencing something different?

We’d appreciate you sharing your thoughts with us and the wider business community, as whatever happens in the coming months and years, it’s pulling together and sharing knowledge that will help more SMEs and entrepreneurs survive, and thrive.

 

Jen Smith is a freelance writer and content strategist. Follow her @_JenSmith

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Jen Smith

Jen Smith is a freelance writer and content strategist. Follow her @_JenSmith

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