#ThoughtLeadership: Brexit and SMEs…

Brexit - if you are a SME planning your next steps...do you have contingency plans in place to grow the business and take advantage of the opportunities that leaving the EU will bring?

If you are a SME thinking beyond Brexit…do you have contingency plans in place to grow the business and take advantage of the opportunities that leaving the EU will bring?

UK plc is feeling uneasy.

Brexit is only a few weeks away, and the general feeling among Small to Medium-sized Enterprises – SMEs – is that of being caught up in a surreal dream, if not an outright nightmare!

Most of the talk and planning has centered around larger business and corporates, while the specific concerns of SMEs have been largely overlooked.

Most SMEs do not have the luxury of the operational “padding” and economies of scale enjoyed by larger, more robust, businesses and they have been calling for the need to minimize the disruption and upheaval caused by Brexit. Together with the rest of the UK, they are all still in the dark, and wait to hear of news – any news – from Westminster…or Brussels.

So, just a few weeks away from a hard or soft Brexit,  in reality, what can a SME look to put in place to act as a safeguard against the Brexit shocks?

We took a snapshot of general viewpoints across…

Talent

The end of free movement for Europeans and tighter immigration rules post-Brexit will impact small and micro businesses if they are reliant on foreign nationals, especially if operating in industries such as hospitality, food and drink, and professional/financial services. According to figures released by the Chartered Institute of Personnel & Development, between the first quarter of 2016 and the first quarter of 2018, there was a massive 95% fall in EU nationals joining the UK workforce. During 2018, many employers experienced issues recruiting and retaining staff.

Proposals for new immigration systems and visas will ease these difficulties in the long term. In the short term however, most businesses have put recruitment on hold and are trying hard to keep their staff in place. Home-grown talent will take time to train, and this isn’t helped by the fact that many Millennials and Gen Zs do not wish to apply for such jobs.

Growth

Although the brakes appear to have been applied to the UK Economy since the Brexit vote, happily, most firms have forged ahead with their own growth plans. UK SMEs make up 99% of all UK firms and as Deputy Director Mark Hart of Enterprise Research Centre wrote: research is showing that the most innovative firms are finding ways to grow despite shocks to the economy – chiefly by focusing on their productivity and looking to export markets to provide new opportunities.

The International Monetary Fund has predicted that the UK will continue to grow at a rate of just above 1.5pc in the coming years post-Brexit …but its forecast is based on the assumption that the UK does not crash out of the EU, but has a broad free trade agreement in place.

In the meantime…the Centre for Responsible Banking and Finance at the University of St Andrews believes that SMEs will be impacted negatively, especially the high-productivity, export-oriented and import-oriented firms. Areas such as customs procedures,  immigration rules and new sector-specific regulations are critical for SMEs to plan and continue operating.

There is a Brexit silver lining that should realise opportunities for SMEs. While some SMEs are spreading their bases and opening offices in the EU countries – making it easier for them to tap new markets and access new talent pools – others are exploring international markets further afield. It is worth pointing out that many small businesses will need more support from government before they consider exporting.

With digital trading forming a large part of the small and micro business DNA, many believe that they are already tapping into those markets, albeit on a micro-basis. Whether it is a start-up, scale-up or lifestyle business, Brexit has not stopped their progress, but it has affected the number of awarded contracts/tenders with larger companies that appear to be adopting a wait and see approach to engaging SMEs in their supply chains.  It may be anecdotal, but many SMEs have remarked on this during this past year.

Trade

In the long run, as we stated above, trade is the silver lining – especially as UK goods and services continue to be sought after across the world.  As the government reported, in 2017, the UK exported around £342 billion to non-EU countries and a further £274 billion to EU countries. As of June 2018, the UK’s exports were up 4.4% compared to the same period a year previously, with the trade deficit narrowing by £6 billion over that period.

The issue lies only in the speed with which the Government will have new trade agreements in place for Europe and other countries. Most SMEs tend to export to their goods and services close to locations near where they operate, which means they are still far more likely to target EU countries than more distant markets such as Africa, Brazil and China.

A post-referendum survey of SMEs by PWC highlighted that  for SMEs,  trade deals and market access are more important than immigration targets, or environmental legislation and emission targets. Two thirds (66%) of firms say Westminster should focus on agreeing continued access to the single market, while 62% also want trade deals to provide access to non-EU markets – singling out Germany as the top priority EU market for 67% of SMEs with the next preferred export markets – France and Ireland – lagging well behind and favoured by only 5% and 3% respectively. 

The only way SMEs can emerge on the Brexit winning side is if they try to reduce their risks and plan to maximise any arising opportunities. That however takes time and planning, and as the CBI’s Brexit survey in November 2018 revealed, fewer of its smaller members had undertaken any scenario planning than their larger counterparts (44% vs 76%).

Come April, planning, an agile approach and digital/new technology are just few of the tools in the SMEs’ arsenal that they can use to protect themselves from an economic fallout.

So if you are a SME thinking beyond Brexit..spend a few days getting your house in order. Do you have contingency plans in place to grow the business and take advantage of the opportunities that leaving the EU will bring?

#Proud2support #Media: #FQ3 Forum Discusses The Growth of UK Women Owned Businesses

Market Accents is supporting the UK Economic Blueprint in the UK and is a TeamEB Marketing Lead and also participates in the Access to Markets workstream.

October 2016, London UK. Pink Shoe, together with the Enterprise Research Centre (ERC),  organised the third International Female Quotient Forum (#FQ3) at The Shard in central London on Wednesday 26 October 2016. This well-attended event provided the ideal forum to advance the discussion for opportunities for women-owned businesses (WBs) in a complex and post-Brexit economy with representatives from the City, corporate, public sector and professional industries.

The key conversation during #FQ3 was focused on how to harness female talent to drive economic growth, reinforcing Prime Minister Theresa May’s vision on the contribution of women-owned businesses in the UK today. Facts such as “only 20% of SMEs are WBs” from a UK population where “51% is female” set the scene for the forum agenda.

Helene Martin Gee, Founder and President of Pink Shoe, welcomed guests present and introduced Caroline Dinenge, the Minister for Women and Equalities, who opened the forum with a keynote speech that emphasized the importance of opportunities and support. She talked about the challenges faced by female entrepreneurs and WBs, and the fact that there are now more women-led businesses than ever before.  She said that WBs currently inject around £115 billion to the UK economy. Furthermore, Britain has been ranked as the best place in Europe for female entrepreneurs.

Having set the direction, the programme continued with an update on the UK Economic Blueprint (EB) by Jill Pay, Chairman of Pink Shoe Senate. Professor Stephen Roper of Enterprise Research Centre (ERC) spoke next, saying that the ERC warmly welcomed the initiative and endorsed their ongoing strong support for the UK EB. His speech was followed by presentations, national and international case studies and panel discussions on opportunities arising from beyond the UK shores, including the Commonwealth and importance of the global export market, especially in the light of a post-Brexit economy. Panel speakers included Lord Jonathan Marland, Jennifer Bisceglie and Joanna Santinon, with chair Maggie Semple OBE, and Deb Leary OBE, Christine Hamilton and Lucinda Bruce-Gardyne with Chair Melanie Eusebe.

Helen Walbey, Federation of Small Business (FSB) UK-wide Diversity Chair highlighted findings from the FSB’s recent report on women and enterprise, noting that most of the challenges faced by women entrepreneurs and SME business owners – such as cash flow and access to finance – were similar. However, women-led businesses also experienced additional issues which were more gender-specific.  These included balancing work and family life (40%), achieving credibility for the business (37%) and a lack of confidence (22%).

This same national snapshot was confirmed by Dr Karen Bonner from ERC, who gave an update on the latest research on SMEs. Insights from national statistics indicate that the UK female rate of early-stage entrepreneurship is around half the male rate – a picture shared with most high income economies,  with the exception of the US where it is two thirds of the male rate.  In addition, entrepreneurs’ growth ambition is strongly linked to subsequent performance.  There are differing ambitions for males and females, and the results indicate that women prefer flexibility to growth.

The closing remarks were given by Craig Tracey MP, Chairman of All Party Parliamentary Group on Women and Enterprise,  who said that the findings and trends, including the case studies and various panel discussions were very significant and were sending a strong message to government about the importance of women-led businesses. He told the audience present , “It was a privilege to be asked to speak at this event and to support the promotion of better gender equality for women in enterprise.”

This third forum was a milestone in a 5-year programme that will see the development of the first-ever UK Economic Blueprint for women-owned businesses. It followed on from last year’s successful #FQ2 forum which marked the launch of the Economic Blueprint and the Ten Point Plan underpinning its delivery. Since then, Team EB with seven supporting work streams has defined the vision, mission and scope of the overall programme, as well as the individual work stream plans which will bring this innovative and unique platform to fruition.

As Jill Pay explained, “#FQ3 is an important milestone in our overall strategy and plans. We are now in Day One of Year Two. We are breaking down barriers and opening up opportunities for WBs using advocacy and influence to seek policy and economic solutions to improve opportunities for WBs while developing technological and collaborative platforms to underpin the EB.  The EB digital platform will be an independent, inclusive, first port of call for advice, information, support, training, mentors, case studies and innovative tools that will help women to start and scale up their businesses. Over the next year we will seek sponsorship in three areas: the design, creation and development of the EB digital platform,  a programme of road shows to take the EB around the UK and a programme manager to ensure progress and quality outcomes. ”

Helene Martin Gee concluded, “Today, the UK Economic Blueprint is more than just a concept. In the last year, we have defined and developed the project framework that will deliver the Economic Blueprint and digital platform and the seven work streams are all engaged in developing plans to bring it to fruition. Following #FQ3, we are stepping up the momentum.”

Helene continued, “The Blueprint has strong support from Ministers, MPs and Peers and via the All Party Parliamentary Group for Women and Enterprise and other leading All Party groups. We are also forming strong partnerships with corporates, business owners and national organisations to reach the largest possible number of WBs. Today we read out comments from Lady Barbara Judge CBE, Chairman of the Institute of Directors, who said that it is vital that women’s voices are heard right across business. Lady Judge was encouraged and added  that the work we are doing on the first UK EB for Women will help to support and encourage more women into business and entrepreneurship, and that can only be a good thing for the whole economy.  As we have said since the beginning of our journey, we will continue to use advocacy and influence to seek policy and economic solutions to improve opportunities for WBs, and with the assistance of our international and UK partners and supporters, we are confident that we can achieve our goals.”

Ends

About Pink Shoe

Pink Shoe is an influential and innovative business network that works to positively impact life-long development of women.  Its founder is Helene Martin Gee.  Patrons are The Rt. Hon Theresa May  MP and Tessa Sanderson CBE.  The Pink Shoe Senate, which drives development and strategy, is chaired by Jill Pay.

Established in 2007 in London, Pink Shoe creates initiatives across the UK to advance talented women at all levels.  Members are an eclectic mix of high-ranking professionals encompassing government, industry, academia, entrepreneurship, public service and third sectors.  Its special focus on entrepreneurship includes working in partnership with key Parliamentary groups to generate a range of vibrant and interactive events connecting prominent and emerging entrepreneurs, and young people of all backgrounds with Parliament.  Alongside this Pink Shoe creates unique programmes to encourage more women and under-represented people to enter public life.

www.pinkshoeclub.com

 

About WIPP

Women Impacting Public Policy (WIPP) in the US was founded in 2001 (see www.wipp.org). It is non-partisan and now represents 4.7m women in business and has 78 partnering organisations. Creating a definitive Economic Blueprint for Women: http://c.ymcdn.com/sites/www.wipp.org/resource/resmgr/Economic_Blueprint/EconomicBlueprint2016.pdf

WIPP International’s mission is to build powerful collaborative networks among leading women-led organisations to leverage their joint power to negotiate for policy and economic solutions to enable women to achieve economic independence and participate fully in their country’s economic growth.

WIPP International identified the UK as the first country to develop the Economic Blueprint globally and has chosen Pink Shoe as its delivery partner.

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