A recent survey suggests they believe the new currency will have little beneficial effect on their business.
Grant Thornton’s European Business Survey 2002 shows that around half of British SMEs believe the single currency will have a negative impact and 14% think it will have no affect at all on their business.
But Andrew Godfrey, Grant Thornton’s head of international and European services, feels that UK businesses need to address the euro issue “as a matter of urgency.”
Any UK firm that does business with a country that deals in euros will have to adapt, to deal with the conversion, he says. “Firms must act now to ensure euro preparedness.”
Jim Redman, head of research at the Forum of Private Business, said that the proportion of small businesses that do export to the euro-zone “are aware of the implications.” The vast majority of small business owners, however, he says, do not know what the effects will be.
The introduction of a single currency can offer opportunities for small businesses to move their activities into the euro-zone, Redman points out. For example, “it will give businesses the ability to compare prices across 12 countries.”
Instead of having to convert the different currencies into sterling, the euro makes things more transparent and will allow quicker checking of a business’s competitive position.
The flipside is that “European businesses are going to be more competitive in Britain,” as well. This is because sterling is currently much stronger than the euro.
Redman urges small business owners to look at the whole process (of the introduction and use of the euro) to see how it works. Then if sterling does reduce in strength against the euro, businesses will be prepared and will know what to do to take advantage of the improved trading conditions.
“The UK is going to be seeing a lot more euro notes from 1 January, than other currencies,” he adds. He believes that to remain competitive, businesses will need to facilitate the use of this currency in their transactions.
Redman concludes that the bulk of small business owners’ perception of the issue is based on what they have seen in the media. “Small business owners have to look beyond the emotional and remember that they are running a business.”
With thanks to Lloyds TSB Success4Business.