Brexit is more than just fodder for the news cycle. Behind the extensive coverage are real people and businesses feeling the impact of the UK’s withdrawal from the European Union (EU).
The UK formally left the EU on January 31, 2020. Currently, the UK and the EU are involved in talks to decide on the details of its relationship moving forward. While this period of transition is in effect, the UK is bound by the rules of the EU, and trade relations remain the same.
This transition period has largely kept the economy at a status quo. However, Brexit is slated for completion on December 31, 2020. The full impact of Brexit to the economy, especially small businesses, can only be predicted once the details of the agreement between the EU and the UK are hammered out.
However, despite all the uncertainty that surrounds Brexit, it is generally accepted that the usual course of how things are done will change. Small businesses should be ready for them.
The Free Flow of People
The impact of Brexit is hinged on what the EU is. It allows the easy flow of trade – this means that no extra fees are imposed when moving goods around the member countries. Aside from free trade, citizens of EU countries can relocate to the country of their choosing without the usual checks and permits.
The UK’s withdrawal from the EU means it no longer has automatic access to these circumstances. Of course, this does not mean that the UK is precluded from free trade and immigration. It will just have to have its own agreements with other countries.
For small businesses, employment is an area where Brexit can manifest itself first. Businesses will have to adjust to tighter immigration rules. This may require a rethinking of recruitment strategies, such as allotting more time for the hiring process to accommodate the application of work visas and other permits.
Employers will also have to prepare for a leaner pool of potential employees to choose from, as there may be fewer people who can work in the UK. Compensation packages may also require some changes to attract and retain desired talent.
Another issue that small businesses will have to contend with is with its supply chain. In the short-term, Brexit is expected to disrupt supply chains because the UK will have to negotiate its own trade deals with other countries. Locally produced goods may not be initially enough to supply the needs of consumers. Small businesses are vulnerable to this disruption because unlike larger entities, they usually cannot afford to stockpile large amounts of the materials it needs to operate.
With negotiations still taking place, it can be difficult to tell how trade will look like post-Brexit. Small businesses should consider a situation wherein importing goods will be constrained with higher tariffs, costs, and bureaucracy. These can have a significant impact on the bottom line of business.
Economics always makes room for uncertainty – a concept that is certainly plentiful in the current Brexit situation. While there will undoubtedly be changes in the small business landscape, it can be sure that trade will continue with the EU. The smoothness of the trade is the only concern. For small businesses to continue to thrive, they will have to display foresight to prepare for the different possibilities and flexibility to put those preparations in action.
Join the discussion as we dive deeper into the UK small business climate amidst the current economic crisis brought about by the Coronavirus pandemic.
If you want to learn more about the live discussion of what does a no-deal brexit mean for UK small businesses, you can get in touch with Annette & Co. for FREE business advice. Better yet, you can tune in to my Podcast – Uncover Wealth Radio – where I talk about the latest updates on UK Businesses and also COVID-19 every workday at 11 in the morning. You can also join my exclusive Facebook group that talks about a lot of business matters and UK businesses.
For more information about this matter, be sure to check out Episode 152 of Uncover Wealth Radio. If you’ve missed the LIVE broadcast, you can always revisit the episode here on our website, Annette & Co.