We have produced a series of “Defying Gravity” reports focussing on medium sized businesses’ views on their future in a world of political and financial uncertainty, where globalisation and disruptive technology are bringing rapid and frequent change. The series draws conclusions about how they can achieve high performance despite challenging times, helping owner-managed businesses (OMBs) to defy gravity.
The most recent report focusses on international aspects, including Brexit. Among the findings were:
- Fewer than half of business leaders believe the UK economy is “strong and stable”.
- Brexit is believed to be exerting substantial downward economic pressure, which is already being felt by some OMBs.
- The fall in the value of the pound is having a significant impact on the day-to-day trading of many OMBs - over half feel that currency volatility is damaging their business.
- Nearly two-thirds believe that continued single market access is critical.
- Businesses owners are concerned about future human resources, with just under half fearing that they currently lack the talented staff needed to further their growth.
Many OMBs are concerned that the focus on supporting regional development and infrastructure is being lost as the Government becomes distracted by Brexit. Many OMBs also believe that targeted policy support will be necessary to help them flourish in a post-Brexit world.
However, it was not all doom and gloom among business leaders, with many feeling Brexit changes will bring opportunities. This is especially true when looking at the UK’s flourishing technology sector, which the Government recognises must be protected following Brexit. They hope the Government will make agreements with countries beyond Europe, so that tech-specialists from China, India and the US can obtain UK visas more easily, allowing companies to hire the right talent for the job.
Over 80 per cent of OMB leaders are aiming to grow their turnover this year, with a corresponding increase in their workforce. Despite the market challenges, many businesses feel confident they will deliver this – 62 per cent were even willing to bet their house on achieving it!
Many business leaders are looking for opportunities beyond the EU in an attempt to widen their horizons, looking to trade with China, the US, Australia or Canada, or perhaps to create their own presence in these countries. This approach is not without risk and businesses need to take appropriate legal and other advice in all relevant jurisdictions to maximise the chances of success.
Businesses are also looking to re-organise their own supply chains beyond Europe. Of course, for many businesses, trading relations with Europe are likely to remain key, with many businesses taking steps to secure a foothold in another European country before Brexit. Again, careful consideration and appropriate advice will help OMBs navigate this.
OMBs are facing a period of turbulence and uncertainty. With this comes the need to adapt business plans, adopt new strategies and allocate sufficient resources to ensure that they can deal with these pressures. Equally, uncertainty can produce many opportunities for businesses willing to embrace change and new technologies. With well over half of OMBs focused on growing turnover to maintain profitability, many business leaders may have no choice but to take calculated risks in order to help secure the future success of their businesses.
If you identify with any of the results and want help internationalising your business, please get in touch. For more information on our Defying Gravity report series, to read the report in full and for more details about how to get involved, please visit www.wearedefyinggravity.co.uk.