SMEs split over Brexit

Small to medium-sized enterprises (SMEs) are divided on the impact of Brexit, the UK’s decision to leave the European Union, with 36% believing it will help them enter new markets, while 41% expect it to be a hindrance.

The finding is part of a survey of around 1,000 SMEs from venture capital firm Albion Ventures. It found that views on Brexit vary among SME owners by size, region and age, in line with trends among the overall UK population. For example, younger SME owners are most concerned about Brexit with 54% of those under-35 saying it will hamper efforts to enter new markets. Leaving the EU is also seen as a major obstacle to growth by SME owners in Scotland and London, two regions which voted to remain in the referendum. Sole traders are among the least concerned about Brexit, with 56% saying it would not affect their business. On a sector by sector basis, manufacturing businesses were most bullish about Brexit, while retailers and construction companies are the most concerned.

In other findings, finding skilled staff was considered the biggest challenge faces by SMEs, particularly as 50% of them with over five employees plan to increase the headcount in the next two years. Other challenges are red tape, regulatory change and the difficulty of entering new markets. But access to finance has dropped as a challenge from fifth place in 2015 to 13th place. Albion Ventures managing partner, Patrick Reeve, commented: “Against a backdrop of profound change, one element that has remained reassuringly unchanged is the optimism underlying the UK’s small businesses. Firms are looking to grow their headcount and productivity is on the increase. The biggest barrier to growth, finding skilled staff, is generated by success rather than failure. The downside is that the economy is coming under capacity constraints at a time of considerable political uncertainty.”