November 7, 2017
Two-thirds of SMEs don't have a plan for Brexit
CitySprint's fifth annual survey of over 1,000 decision makers and business owners at UK SMEs found a drop in confidence amongst UK SMEs. Worryingly, two-thirds (64%) have not made specific plans to prepare their business for Brexit.
The survey found that three quarters (77%) are as confident or more confident about the future of their business compared to 12 months ago. However, this figure is a substantial drop from the 85% figure recorded in the 2015 survey, indicating some signs of concern about the future.
Not surprising then, that a significant 43% said they lack confidence in the government's capability to safeguard their business from the impact of Brexit.
Despite concern about the future, UK SMEs have yet to feel any considerable impact on the bottom line from Brexit, with 87% reporting they are in the same or better shape financially compared to 12 months ago.
However, when asked what impact leaving the EU will have on their business, around one in five (19%) expect profit margins to decrease and one in six (17%) expect revenue to drop.
Patrick Gallagher, group CEO at CitySprint Group, comments,
'Whatever difficulties the future holds, it's 'business as unusual' for the UK's SMEs. They have more than weathered the economic ups and downs of recent years, and by working with each other, they will no doubt continue to adapt to the times. Smaller enterprises are both highly agile and deft at reinventing themselves and the way they work to suit the times. It's their biggest advantage.'
Despite the majority of small and medium-sized business failing to put secure plans in place to prepare their business for Brexit, they have taken some steps to future-proof their company since Article 50 was triggered in March 2017 with a third (32%) have upped business development activity, while more than a quarter have decreased their fixed and/or variable costs (27%) and a similar number have increased investment in capital goods or technology (25%). One in five (20%) say they have upped headcount in response.
The survey found that 30% of SMEs believe lower customer demand is the biggest obstacle for SMEs in the next 12 months. Brexit (28%) and inflation (21%) come in as second and third respectively. Significant numbers also reported growing competition (20%) and increased operating costs (20%).
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Posted on November 7, 2017 at 04:47 PM