Small businesses in the U.K. are taking a hard look at their role not only in the national market, but on a global stage. Brexit has forced many SMEs to explore how they can remain financially stable and successful despite geopolitical shakeups, while they’re also forced to pay close attention to regulation in an effort to keep the global trade doors open.
New research from MarketInvoice and a separate study from American Express, offer a renewed look at how U.K. businesses position themselves in a global market wrought with volatility.
According to the report released this week, more than a quarter of executives said they believe the government has lost its way, with the same amount believing that their government is not adequately prepared for Brexit negotiations.
Just 5 percent said they believe David Davis, secretary of state for exiting the European Union, is doing a good job with these negotiations as the U.K. prepares to leave.
Researchers also found widespread concern among the nation’s business leaders, with the majority saying market uncertainties lead to lack of sleep. Fifty-eight percent of business leaders told MarketInvoice that the U.K. should prioritize securing a trade deal with the EU.
That statistic is telling, considering very few business executives are concerned about losing access to foreign workers, the weak pound, or government stability, according to MarketInvoice data. Even with business executives keeping a watchful eye on how their nation handles Brexit, the survey seems to suggest that companies aren’t too worried about their position on the global stage.
“Business leaders are clearly focused on ensuring they are prepared to do business before worrying about people issues,” said MarketInvoice CEO and cofounder Anil Stocker in a statement. “Anecdotal feedback from this survey is that businesses in the U.K. are getting on with it but are clearly unsettled, which doesn’t make for a healthy business environment.
“The good news,” Stocker says, “is that businesses, finally, feel their voices are being heard by government but are not inspired with confidence with the negotiating efforts.”
Analysts have explored how Brexit is affecting SMEs’ health, specifically, with some concerned that the decision to leave the EU could be to blame for a spike in insolvency rates or that they are particularly vulnerable to knock-on effects of Brexit like FX volatility.
But separate research from American Express finds that SME importers aren’t too concerned with the weaker pound, either, and that SME exporters in the U.K. are suddenly wielding a more competitive edge.
The drop in the pound has actually helped 90 percent of U.K. SME exporters, American Express found, and led to an average increase of 16 percent in margins. Even more, 95 percent said they plan to boost exporters over the next year.
SMEs with both importing and exporting operations are especially confident and experiencing the greatest positive impact of a weakened sterling, researchers found.
“Exchange rates have a huge impact on U.K. SMEs with an international footprint, and on their ability to maintain their place in the local and global economies,” said Jose Carvalho, American Express’ senior vice president for global commercial payments Europe, in a statement. “Those already involved in exporting are seeing the business benefit, and whilst others currently focused on domestic activity might be daunted by the idea of exporting, there are plenty of resources out there for ambitious businesses.”
Of course, Brexit isn’t positive in every regard for SMEs. American Express found more than a quarter of small business owners said they consider FX volatility to pose a risk to their companies, with nearly the same amount saying they can’t predict the ultimate value of a 30-day invoice.