Whilst the true impact of the decision to leave the EU will probably not be known for many years, there certainly does seem to be an air of uncertainty within the business community.
We are also hearing of anecdotal evidence that some sectors are already feeling the impact of the decision, whether they are in property and construction or reliant on migrant labour.
With consumer confidence strong and the economic growth forecast still positive overall, business is not in a bad place and thoughts shouldn’t turn to economic downturn.
Uncertainty and confidence could in some cases be more a state of mind founded on a lack of knowledge and a sense of loss of control. Perhaps it is the unknown that is underpinning our rational, even irrational thought. Most businesses though adopt the approach if we don’t know what is happening then it is easy not to do something, or to do so would require a level of work or activity that is not preferred or desired.
For those looking to assess the impact of Brexit on their business, the starting point might be around what might change or what is going to be different. It would seem some of the changes or challenges ahead are:
- Workforce related with perhaps for some businesses a mix of increased shortages of labour/skills plus the potential increase in the wage bill
- The increased cost of imported goods and raw materials, with the weakening of the pound
- New trading terms and tariffs for individual EU member countries if we come out of the single market, as well perhaps for our non EU counterparts in the rest of the world
- The potential threat of increased tax charges to cover the cost of exit and to underpin the economy during the exit process
- Changes and variations to tax legislation generally as we no longer have to align or adopt EU tax legislation
- Loss of and/or no new funding from the EU for social and economic projects, including those linked to infrastructure, business or deprivation
- The potential re-location of UK offices of leading global players if we come out of the single market.
Whilst there are bound to be other concerns creating uncertainty for the period ahead, perhaps the best approach to deal with this is to scenario plan, assessing the likelihood of something occurring along with the impact such an event may have on your business. With such knowledge at least thoughts can be given as to how you might mitigate an adverse situation or capitalise on the more favourable ones. Certainly the UK’s exporters should benefit from the weakening of the pound and if you are a trade negotiator you are likely to be in demand.
James Pinchbeck is Marketing Partner at Streets Chartered Accountants, a top 40 UK accountancy practice. James, as a specialist in marketing professional services, is responsible for the development and implementation of the firm’s strategic marketing as well as its engagement in the community it which it works and serves.
His role allows him to capitalise on his broad interest in the national and local economy as well as his passion for enterprise. As part of his wider interest in enterprise, marketing and education, James is a board member of NBV – the East Midlands Enterprise Agency, an FE College Governor and a board member of the University of Lincoln’s Business School. He is also an Institute of Director’s past Branch Chairman.