Management / British SMEs face uncertainty after UK votes to leave Europe

British SMEs face uncertainty after UK votes to leave Europe

The British public have decided to leave the European Union – a decision that could leave small businesses in the UK in unchartered waters. David Cameron has stepped down as prime minister, the pound has fallen to a low not seen since 1985 and the FTSE 100 has seen more than £120billion wiped off its value.

More than 33 million people from England, Scotland, Wales, Northern Ireland and Gibraltar voted, with 51.9 per cent voted to leave and 48.1 per cent remain.

In his resignation speech, Cameron said that it would be up to the new prime minister to trigger Article 50 of The Lisbon Treaty – the formal and legal process of leaving the EU. It is estimated to take about two years to potentially a decade to unwind Britain’s 43-year membership of the EU.

For British small and medium sized businesses (SMEs), it will mean a lot of uncertainty ahead. Rich Preece, Europe VP and managing director of Intuit QuickBooks, says: “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.”

Europe has been a big market for SMEs wanting to trade internationally. Mike Cherry, national chairman of the Federation of Small Businesses (FSB), says: “Nearly a quarter of FSB members export, the majority to the single market. Access to the single market means access to 500 million potential consumers and more than 26 million businesses. We call on the government for clarity on the impact to smaller firms who export through EU FTA agreements.

“These are crucial questions that need to be answered swiftly to ensure the confidence of the UK’s 5.4 million small businesses does not fall any further, which is already at the lowest levels since 2013. FSB calls on the government for clarity on what these decisions mean for business, including how they will have access to the single market and the free movement of people and trade.”

A survey by Grant Thornton found 60 per cent of small business and 61 per cent of mid-sized businesses were in favour of Remain. Ed Molyneux, CEO and co-founder of FreeAgent, a tech firm based in Edinburgh, says: “It was clear that the overwhelming majority of micro-business owners and freelancers were in favour of the UK remaining in the EU, and that they did not think a “Brexit” would be beneficial for their own businesses or the economy in general.

“The ramifications of leaving the EU are huge – especially for small businesses who sell products and services worldwide, rather than just domestically. We now look set for a lengthy period of uncertainty.”