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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. Three years on and many of us are still none the wiser. 

Whilst Prime Minister Boris Johnson was finally able to secure a majority in Parliament for his newly negotiated EU Withdrawal Agreement, many business owners are still scratching their heads over what this all means. 

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. 

I’ve put together my SWOT analysis of the situation for a small business owner. This is less about the economic data on Brexit and more about the way in which small businesses can react to instability and uncertainty. 

 

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 some imported goods set to increase, it’s likely that doing business is going to cost more.
  • Admin and delays. Whilst much has been made of the unburdening of EU red-tape for businesses, post-Brexit trade with the EU may mean more customs paperwork and checks – especially in a no-deal scenario. 

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

  • Now is the perfect time to review your supply chain and look for savings and improve effeciencies. This is good business practice regardless of Brexit.
  • Businesses who export goods have seen greater returns thanks to the drop 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 UK will no longer be bound to the 19,000 EU rules and regulations, and the UK government will be free to set its own laws – 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.
  • The UK market will be opened up to goods from non-EU countries such as the USA and China. Potentially great for consumers having more choice, but businesses will face new competitors who do not need to abide by the rules of the EU’s single market.
  • 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.

 

Not sure how leaving the EU will impact your business? Read our guide on how to prepare for Brexit

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Jen Smith

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

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