For UK micro busi­nesses a massive change could be on the hori­zon. Brexit is now just around the corner, with many in the small busi­ness com­munity con­cerned about the adverse impact this could have on their enter­prises.

A recent poll from the cloud account­ing soft­ware com­pany FreeAgent of 500 micro busi­ness own­ers revealed more than two-thirds of respond­ents (66%) said they believed Brexit would have a neg­at­ive impact on the eco­nomy – while just 13% said they thought it would have a pos­it­ive impact.

Among the oth­er find­ings in the sur­vey were that 60% of respond­ents said they would be in favour of hold­ing a second Brexit ref­er­en­dum, com­pared to just 26% who said they would oppose such a move. And just 7% of micro-busi­ness own­ers said that they believed Brexit would have a pos­it­ive impact on their own busi­nesses – com­pared to 38% who said they thought leav­ing the EU would have neg­at­ive con­sequences for them.

To gain an insight into what micro busi­ness own­ers and ser­vice pro­viders whose cus­tom­ers include small busi­nesses, I have been ask­ing the ques­tion: will micro busi­nesses thrive after Brexit. Below are some responses to that ques­tion, which gives a good snap­shot of cur­rent opin­ion.

Darren Fell is the CEO and Founder of Crunch

Dar­ren Fell is the CEO and Founder of Crunch

Micro busi­nesses have a great chance to cap­it­al­ise on the chan­ging con­di­tions that will fol­low Brexit. The polit­ic­al and eco­nom­ic uncer­tainty that is prov­ing so dif­fi­cult for large busi­nesses may be an advant­age for the smal­lest, giv­en their nat­ur­al agil­ity. Unen­cumbered by man­age­ment struc­tures, prop­erty or heavy staff costs, micro busi­ness are quick to adapt and may also escape the worst of any imme­di­ate legis­lat­ive impact. The UK’s micro busi­ness com­munity is increas­ingly ser­vice-driv­en and those in tech­no­logy con­sultancy, IT and change man­age­ment are likely to see fast-grow­ing demand both before and after Brexit, as cor­por­ates seek help adapt­ing, com­ply­ing with new legis­la­tion and even relo­cat­ing.”

 

Mike Smith, Director, CompanyDebt

Mike Smith, Dir­ect­or, Com­panyDebt

While micro­busi­nesses may not be as dir­ectly impacted by Brexit as SME’s, any over­all eco­nom­ic impact is going to exert a ripple effect on the sec­tor, which is the largest part of our busi­ness com­munity. If interest rates rise, we are going to see micro busi­nesses find­ing it harder to access fin­ance. Those busi­nesses which need to import goods will cer­tainly find their bot­tom line affected, and of course, there is the on-going con­cern over our employ­ment land­scape, and the pos­sib­il­ity of skills short­age if free move­ment of EU work­ers is restric­ted.”

 

Julia Kermode, CEO, The Freelancer & Contractor Services Association

Julia Ker­mode, CEO, The Freel­an­cer & Con­tract­or Ser­vices Asso­ci­ation

Freel­an­cers, con­tract­ors and the self-employed are all micro busi­nesses and for them, all the uncer­tainty around Brexit could be extremely pos­it­ive as they may find them­selves more in demand than ever, as busi­nesses will need the flex­ib­il­ity that this work­force brings. These are the work­ers who can enable busi­nesses to be agile and suc­cess­ful in times of uncer­tainty and busi­nesses which might be strug­gling with the impact of Brexit, can turn to micro busi­nesses for spe­cial­ist skills, expert­ise and know­ledge to help them through the pro­cess without com­mit­ting them­selves to all the costs (and risks) that come with hir­ing a full-time employ­ee.”

 

Dave Chaplin, CEO and Founder, ContractorCalculator

Dave Chap­lin, CEO and Founder, Con­tract­or­Cal­cu­lat­or

Where there is change there is always oppor­tun­ity. Leav­ing the EU is a massive one-off pro­ject that will impact on vir­tu­ally every organ­isa­tion in the UK. This is exactly the sort of pro­ject that freel­an­cers and con­tract­ors are best at. There is a lot of uncer­tainty around Brexit which is not good for employ­ment and employ­ees but is pos­it­ive for freel­an­cers and con­tract­ors, those micro busi­nesses which are a low- risk altern­at­ive to employ­ees dur­ing uncer­tain times.”

 

Mark Hart, Deputy Director of the Enterprise Research Centre and Professor of Small Business and Entrepreneurship at Aston University

Mark Hart, Deputy Dir­ect­or of the Enter­prise Research Centre and Pro­fess­or of Small Busi­ness and Entre­pren­eur­ship at Aston Uni­ver­sity

The most author­it­at­ive sur­vey of UK micro-busi­nesses was under­taken by the Enter­prise Research Centre (ERC) in 2018 (Q1) and showed that many are home-based and three-quar­ters have no growth ambi­tion and aim to ‘keep their busi­ness sim­il­ar to how it oper­ates now’. So, with March 2019 approach­ing at speed, the evid­ence would sug­gest that, giv­en their cur­rent mod­est per­form­ance and ambi­tions, this is not a group of firms that is ‘set to thrive’ after whatever type of Brexit emerges. Increas­ing uncer­tainty over the poten­tial for a ‘no deal’ will only serve to exacer­bate this assess­ment.”

 

Ben Martin, Founder of the Brexit Tracker

Ben Mar­tin, Founder of the Brexit Track­er

Micro busi­nesses have been hit hard by Brexit. Fall­ing con­sumer and busi­ness con­fid­ence levels have slowed down decision-mak­ing and spend­ing com­mit­ments, which are the lifeblood behind a micro enterprise’s exist­ence. Such micro firms have little sur­plus cash and an even smal­ler pool of resources. So, they’re unlikely to be able to grasp inter­na­tion­al trade oppor­tun­it­ies eas­ily and so profit from the weakened GBP. Yet it is not all bad news: These firms are also the most-nimble and can pivot their sales strategies quickly and instantly com­mu­nic­ate to all their staff, sup­pli­ers and cus­tom­ers to learn from Brexit issues and take action.”

And what’s my view? I think Brexit is an oppor­tun­ity for all micro busi­nesses. Yes, there could be an ini­tial peri­od of adjust­ment with price rises, but these should sub­side as the world adjusts. Napo­leon is quoted as describ­ing Eng­land as a “nation of shop­keep­ers” with indi­vidu­als run­ning their own enter­prises. We’d call them micro busi­nesses today. So per­haps Brexit will return the coun­try to a more inde­pend­ent stance, with micro busi­nesses deliv­er­ing a myri­ad of products and ser­vices. Let’s revis­it this top­ic in a couple of years, to see who was right. Stay tuned.