Almost one in two (46%) small business owners predict clear opportunities for their business as a result of Brexit according to new research by Hitachi Capital Business Finance. Whilst the uncertainty surrounding the UK’s withdrawal from the EU has been seen by some as a basis for gloom, many small business owners regard the period of change as presenting tangible opportunities.
Despite questions about the duration of the divorce process and renewed calls for a second referendum on the issue, the small business community appears to regard the current period of change and uncertainty as presenting tangible opportunities.
The main perceived opportunities related to the belief that the UK government would be obliged to do more to support domestic businesses, significant perhaps given the importance that small businesses attached to the need for leadership from the Government during the general election. Coupled with this, many believed the UK’s exit from the EU would result in less red tape holding their business back – and resurgence from UK consumers to buy more goods from British businesses.
Significantly, outlook here has changed little over six months – a period that saw a general election and the Brexit negotiations begin on 19 June. This suggests SME viewpoints are not mere knee jerk reactions at a moment in time, but are firmly held views on real business opportunity.
Perceived opportunities for small businesses as a result of Brexit
|The UK government will be obliged to do more to support British businesses||21%||22%||-1|
|UK consumers will be more likely to buy from British businesses||17%||18%||-1|
|Less red tape holding my business back||17%||21%||-4|
|The weak pound is good news for exporting and building our overseas market share||13%||18%||-4|
|Customers accepting that we have to increase prices||11%||12%||-1|
|Fewer EU businesses to compete with in the UK||8%||8%||0|
|Being able to take market share from bigger UK competitors who are distracted by Brexit issues||7%||7%||0|
|Being able to develop business partnerships with non EU-based partners||6%||8%||-1|
|Being able grow our distribution/ customer base in non EU countries||5%||8%||-3|
|Being able to attract top talent from people leaving larger companies||2%||3%||-1|
|Not applicable – I don’t think anything in particular will be an opportunity for my business as a result of the UK voting to leave the EU||48%||44%||4|
Looking at the two industry sectors where optimism had risen most prominently during the last six months – agriculture and media and marketing – the top five business opportunities mentioned were the same in both sectors. Farmers believed Brexit would result in more consumers ‘Buying British’ and in both sectors there is now a greater sense that the UK government will begin to focus more attention on backing British business.
Given issues such as business rates hit many small businesses hard before the general election, there is clearly a sense or a hope that Brexit will drive the Government to put small business needs higher up on its agenda.
Agriculture sector outlook: The top five perceived opportunities as a result of Brexit (Q3 2017 results compared to national average and sector results six months ago)
|Nat average Q3||Q1 |
|UK consumers will be more likely to buy from British businesses||34%||17%||25%|
|Less red tape holding my business back||31%||17%||31%|
|The UK government will be obliged to do more to support British businesses||24%||21%||14%|
|The weak pound is good news for exporting and building our overseas market share||22%||13%||24%|
|Customers accepting that we have to increase prices||18%||11%||11%|
Media & marketing sector outlook: The top five perceived opportunities as a result of Brexit (Q3 2017 results compared to national average and sector results six months ago)
|Nat average Q3||Q1 |
|The UK government will be obliged to do more to support British businesses||24%||21%||13%|
|The weak pound is good news for exporting and building our overseas market share||22%||13%||18%|
|UK consumers will be more likely to buy from British businesses||16%||17%||14%|
|Less red tape holding my business back||15%||17%||13%|
|Customers accepting that we have to increase prices||9%||11%||10%|
Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance, said: “With Brexit negotiations underway, the widely held view that businesses don’t like uncertainty does not necessarily apply for the small business community. Our research suggests that many see uncertainty as an opportunity: the mother of invention and perhaps even ambition – a chance for many to develop new services and to gain market share.
“Significantly, this ‘Brexit bounce’ from UK small businesses is not a symptom of many enterprises having a local customer base and feeling unaffected by the international picture. In fact, the opposite is true: our latest research suggests fewer small businesses see growth opportunities coming from the domestic market. They are increasingly looking overseas and many are looking to markets beyond the EU.”