Of all the business challenges facing small to medium sized businesses (SMEs) in the UK the looming economic impact of Brexit is the biggest concern they have at the moment. 30% of SMEs list this as their biggest worry with 19% then concerned about the potential for their operating costs to increase. This according to research from The Co-operative Bank.
SMEs were asked to consider their biggest concerns as regards business challenges across a range of business issues. Concerns over rising supplier costs was high up the list and as the table shows competition, red tape and regulation, knowing how to grow their business, late payments and staff issues were also key worries.
|10 biggest concerns of SMEs
|Percentage of SMEs
|Impact of Brexit upon the economy
|Increase in operating costs
|Increasing supplier costs
|How to take my business to the next stage in its journey
|Changing customer behaviour
|Access to funding
Donald Kerr, managing director of SME banking at The Co-operative Bank said: “It’s understandable that SMEs are concerned about the potential for rising costs, particularly when there remains so much uncertainty about the impact that an exit from European Union will have. Small businesses can prepare to adapt to these changes, the first step they need to take is understanding the potential impact on their own suppliers and customers.
The Co-operative Bank has announced it will be extending its free introductory period for SME customers by a year. New Business Directplus customers will benefit from 30 months of free everyday banking, subject to certain transaction limits and a minimum credit balance of £1,000, making it the best-in-market introductory deal for the nation’s small businesses. Existing customers who are still in their introductory period will also benefit from the extension.
With the Brexit impact on the economy top of the list of business challenges and recruitment and training of the concern for 10% of businesses, it is timely that the Office of National Statistics recently revealed that since 2016, there has been a fall in immigration for work; that EU immigration is at its lowest level since 2013 because of a fall in immigration for work, which is now less than half the level it was at its peak in the year ending June 2016.
Mike Cherry, national chairman of the Federation of Small Businesses said: “European business owners and employees are central to the UK’s economic success. One in five small employers rely on the skills of EU citizens and – with employment levels at record-highs – one in three now say finding the right staff is a major barrier to growth.
“A sudden end to free movement on 1 November will make a bad situation worse. Business owners need time to prepare for such a radical change, particularly as 95% of small employers have no experience of using the points-based element of our immigration system.”
Cherry said if the UK does crash out of the EU on 31 October, there will be an environment where businesses taking on new staff are expected to distinguish between those EU citizens who have just arrived and those already resident in the UK, which could prove a challenge.
“The looming threat of a sudden no-deal exit has the two million EU citizens that are yet to secure settled status living in fear, especially those that have planned a short break or business visit on or after 1 November, with no guarantee yet from government that they will safely be admitted on return. The application process has long been beset by glitches and accessibility issues – applications are now taking longer to approve,” he said.
“We absolutely have to avoid a future scenario where our European colleagues find they’re without the right paperwork to stay in the UK. Achieving this should be fundamental to the Government’s no-deal contingency plans, details of which have been slow to emerge.
“Looking to the future, small business owners have been left without any sense of what our immigration system will look like post-Brexit. Clarity and guidance is needed. It’s vital that the voice of the small firms that make-up 99% of our business community is heard as that new system is formed.”
Further reading: Banking – the future for small to medium sized businesses