Should SMEs avoid making any big business decisions until the outcome and implications of Brexit are clear?
In the current political climate, we have seen many SMEs adopt a ‘wait and see’ approach.
Issues around labour, tariffs and a generally weaker economy in the near term are all areas of concern.
SMEs should do their best to understand their industry and get a clear direction on their future trading arrangements before making big decisions.
Across the North East, 50% of the SMEs’ decision makers are not expecting to be worse off post-Brexit, according to new research conducted by YouGov on behalf of the Telegraph and Yorkshire Bank 2019.
But for most SMEs it should be ‘business as usual’ so growth isn’t stifled.
Below, Gavin Opperman, Group Business Banking Director for Yorkshire Bank, answers Brexit concerns small businesses might have...
What should SMEs do to better understand how Brexit will affect their operating environment?
SMEs should audit their business in four main areas in order to understand the impact of Brexit. First is the workforce given potential changes in immigration.
The second is cross-border trade, ensuring you comply with any new rules. The third area is taxation – if you trade in Europe you will need to consider things like Import VAT.
Finally, currency may be volatile and this may affect profitability and your underlying contracts. You can talk to your professional advisers who may understand these risks.
Has Brexit so far had a negative impact on SME investment decisions?
While the Brexit-related decisions of large businesses have hit the headlines, SMEs have gone under the radar but are no less vital.
There are exciting developments in our fast changing economy, and I am confident that the drive to provide innovative new products and services, among newly-formed and existing SMEs, will help overcome any temporary uncertainty.
Employment growth is strong which is encouraging as businesses are prepared to invest anticipating an upturn in demand and productivity over the coming months.
What impact has Brexit had to date on overall business growth?
Undoubtedly GDP has decelerated over the past six months. However, I don’t believe it’s all bad news. SMEs are unique and add significant value to Britain’s commercial wellbeing.
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These are the biggest industries for SMEs in
The North is a stand-out for employment growth across the country, which is pointing to economic dynamism in the region. Although, Brexit might affect certain industries more than others like manufacturing, real estate, food and drink, retail and construction – SMEs must remain confident.
Given current factors, what’s the outlook for the rest of this year?
This is a challenging environment for SMEs but there are factors that give cause for optimism such as investment in infrastructure, so let’s hope we see an upturn in the coming months.
Our latest SME Health Check Index showed strong employment growth and increased borrowing across many UK businesses, which is all good news for the UK economy.
- Find financial support to help your business grow with a bank that works for you. Yorkshire Bank has services to keep your business finances on track. Visit ybonline.co.uk/business