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
“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
“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
“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
“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
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
“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.