Currency EffectsMost small businesses will be affected by the currency effects that Brexit is having and will have in the future. This means that as the pound devaluates, costs increase. There is also the effect that goods that were freely moved into the UK will now cost more which will eventually increase the price of goods that small businesses utilise. However, most of the currency effects that have been experienced have not been largely disruptive up to now. There are many decisions that will take place before Brexit and may well have a larger effect on currency. It is important to make some currency calculations ahead of the time to predict what effects they may have on your small business.
Free Trade EffectsAs the UK leaves the EU, there may well be no free trade agreement left which will have large costing and logistics effects. The biggest problem with this is the amount of new paperwork that will be involved with importing goods which will mean that it will take longer for goods to reach small businesses in the UK. It is important that small businesses look at their logistics needs and make contingency plans if they are reliant on the import of goods solely from the EU. It is unclear whether there will be some transition plan to help businesses with this change so that there is as little impact on business as possible.
Migration EffectsThe movement of EU nationals in and out of the UK and their right to reside and work here is a topic high on the list of the EU-UK negotiation teams. The most significant effect that Brexit will have on migration pertains to seasonal workers and professions where there are skill shortages such as nurses and doctors. Small businesses that use seasonal workers should look at other staffing solutions.
Make Contingency PlansThe above issues are the areas where Brexit will have a significant effect on small businesses and it is advisable that contingency plans are put in place. You should examine the most crucial areas that will affect your small business and make plans accordingly. It is uncertain as to what impact the final decisions taken will have to date. It is best to make contingency plans for both a soft and hard Brexit with all the risk factors mentioned above considered.
Shoaib Aslam is the co-founder of Pearl Chartered Accountants, a UK-based chartered accountancy firm that has multiple locations across London. They are experts in helping startups and established businesses with all aspects of growth, strategy, scaling up, accounting and tax planning.