Whether your vote was to keep us in the EU or to take us out, last June saw a narrow victory for the Brexit option, and last month our PM on the back of huge public attention submitted our letter of intention to trigger Article 50 and take us out of the EU by 2019.
The decision to leave the EU is shrouded in continuous and rather vociferous debate, and although the vote was very close we are now on the way to two years of solid negotiations with the EU to decide on the best possible outcome for both parties. No doubt, the major influence will come from businesses throughout Europe and beyond, and politicians will be working hard to essentially please business and the people of Europe, keeping one eye on the global economic implications around the exit. The pressure to minimise any negative impact on global economic issues will be enormous, and despite the rhetoric on both sides, either side cannot afford a ‘no deal’ or indeed a bad deal.
The UK SME sector faces a degree of uncertainly as does the future of 500 million UK and EU citizens. Despite huge amounts of speculation around the outcome, we will not know the final deal until late 2019, so the next two years will be about planning for the future and maximising the opportunities that will undoubtedly be on the table for UK businesses.
Government initiatives are already underway
The first of those opportunities has already been launched. Delivered by Economic Growth Solutions, the Manufacturing Growth Programme is currently looking to work with SME Manufacturers in the West Midlands, Yorkshire and Humber, parts of the East Midlands and South East of England. This provides a funding mechanism to the value of 35% of the investment to deliver a wide variety of strategic support programmes to improve the prosperity and competitiveness of manufacturers within the United Kingdom. It is almost guaranteed that this initially EU funded programme will gain momentum beyond the exit from the EU with continuous government support programmes being introduced to improve business innovation and opportunities within our shores to create a genuinely global economy. This means manufacturers and the business of manufacturing is going to see a proactive support mechanism for a number of years to come.
Going beyond the negativity!
By our very nature, business owners are an optimistic entrepreneurial bunch, and my advice to any UK business is to grab the likely opportunities with both hands, and put any negativity to the back of your mind whatever your original vote and viewpoint. The weak pound which has seen its value drop quite considerably since the June 23rd vote 2016, could actually be a positive for UK businesses. It will make inward investment more attractive, providing a perfect time to be entrepreneurial and inventive with your future. Investment into new technology, and creating a culture based around increasing the level of Intellectual Property Rights and manufacturing could see significant opportunities for UK business, and start to revitalise UK manufacturing which has been in the doldrums for many decades.
The ability to open up new trade deals could see increases in global trade outside of the EU, which of course could be to replace any EU trading loss or become the icing on the cake with a good EU trade deal in place. Yes, of course it is an unknown quantity, and we won’t really know until the end of next year what our destiny will be.
However, the unknown means we have to plan for the future more than we possibly ever have in the past. We have to be ready for the opportunities that lay before us, or potential periods of difficulty while our country settles into life outside of the EU.
So what should the SME business owner be thinking about now and planning for in the future?
Remember, 99% of businesses in the UK belong to the SME sector, so small and medium sized business owners need to take control of our own destiny and that of our country as much as we possibly can. One important aspect, is our government cannot afford for our sector to fail or suffer, so you could say we hold all the cards in this deal, and making sure our country is prosperous will be down to the support provided, and the positive attitudes of the SME business sector leaders. I am personally very excited by the prospect, but of course I would be lying if I thought it would be plain sailing all the way. Confidence will play a big part, and I suspect we will see a fluctuating pound, with uncertainty potentially seeing the pound drop a little more. However, a weakening pound could also present some big opportunities for businesses to expand overseas sales of products and services. In addition it’ll mean inward investment and tourism will flourish because assets will become substantially cheaper for foreign investors.
I think the Bank of England produced the best advice for UK businesses. Their advice was to prepare for further potential rate falls, embracing and planning for new opportunities moving forward. What is clear, the UK’s overseas suppliers and customers have not disappeared since last June, and extracting the full potential from these relationships requires a strong government, some tough negotiating and a tenacious and determined SME sector to make it work.
Personally, I think we can handle that very well!
My recommendation for businesses is to be prepared. Making sure you have a strategy moving forward, a strong financial position, and a complete understanding of how you want to grow the business beyond Brexit. With initiatives having been launched already, and numerous other incentives and support being planned for UK businesses, I can help you take full advantage and control of your businesses destiny!