Unpredictability for SMEs as Britain votes out

Small and medium-sized businesses (SMEs) and advisers have highlighted the uncertain future ahead for the small business landscape following Britain’s exit from the European Union.

Rich Preece, Europe VP and managing director of Intuit QuickBooks says that, after today’s vote, there will be a transitional period while the UK negotiates an exit agreement.

‘It is possible that negotiations may continue for several years so it will be business as usual for now, but SMEs will have to monitor how the landscape is changing,’ he says.

‘One thing is for sure, throughout this period, managing finances is as important as ever. Whether this means a laser focus on forecasting, a revised approach on expenditure, exploring additional sources of funding or keeping overseas clients on side, putting the bottom line first remains key.’

Jason Kitcat, head of policy and public affairs at Crunch Accounting hopes that the government will move quickly following this result to set out its exit plans to minimise uncertainty for the business community.

‘At the heart of negotiations to leave the EU must be how the growth and productivity of freelancers, contractors, the self-employed and entrepreneurs will be supported in the new settlement,’ he adds.

Despite the panic in some quarters, it is important for businesses to avoid a knee-jerk reaction following the decision to leave the EU, says Julie Adams, senior partner at Menzies LLP, saying that, in the short term, Brexit will have little impact.

‘Fiscal planning won’t change overnight and businesses shouldn’t let economic uncertainty choke up their trade for any longer. Businesses shouldn’t be scared by this outcome, common sense must prevail and a ‘business as usual’ approach should be adopted until further information is obtained.’

From a hiring perspective, there are some segments of the UK economy where staff from parts of Europe are critical for the operations of those industries, argues James Peck, UK country manager Jobandtalent.

‘Brexit adds a huge degree of uncertainty to those industries and of course the SMEs, business owners, entrepreneurs and managers who are the actual day-to-day lives and livelihoods behind the statistics,’ he adds.

‘Moreover, almost every decision small business owners have to make relating to their staff is connected to legislation that was introduced by the EU.’

Peck says that some 40 per cent of UK SMEs are concerned about how the vote will now affect their company’s ability to hire.

With many SMEs operating without dedicated HR staff, small business owners often struggle under normal circumstances to keep up with frequently changing employee regulation – so this period of uncertainty and potential regulation change could hit them hard, he asserts.

‘As we wait to see how employee regulation will inevitably evolve, companies should consider seeking advice on employment law and hiring best practice to avoid getting into hot water,’ Peck adds.

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