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Are small businesses ready for 'no deal' Brexit?

FOR many the idea of GB leaving the EU involves giving it back its independence and freeing it from the constraints of autocratic EU regulations, but as BREXIT blunders along, and we approach the deadline, it is becoming increasingly obvious that there are many hidden flaws and consequences. Just how prepared are we to face the future, if and when we actually do go? Especially as there seems to be a growing likelihood of a No Deal departure.

Small businesses particularly could face many undesirable prospects. Not least the possible hold up of supplies, however temporarily; and delays in exporting their products and services. Big businesses usually have the capacity to stockpile essential supplies and warehouse finished products or have other methods of controlling their destiny. Regrettably this might involve leaving the UK ,partially or wholly will subsequent job losses and hardship. Even if this is attributed to rationalising and said not to be entirely Brexit related.

How much consideration have small businesses given to this issue? Indeed, how capable are they of ensuring that the long and complex chain of supplies remains sound? Large firms may have Contingency plans for storage ,often small and even medium sized enterprises will not. Larger firms have ways of absorbing production issues. Materials may be on hand in other branches of big firms but not so for tinier producers. Surpluses from stockpiling might be alternatively used, be written off or be sold off more cheaply; great for customers, but disastrous for smaller outlets to absorb such costs.  Often we hear the words Project Fear and such worries are perceived as malicious scaremongering, fictional or as minor irritations. Or "we can buy more locally or from outside the EU."

We must hope that the confident optimists are indeed right in their assumptions, but do give a thought to Noah and his Ark, as described in the Bible. It could be a salutary lesson! Despite the uncertainties of new territory, ought we not to try to predict some of the difficulties and plan to meet them? What is scaremongering in that? Unfortunately in the time remaining we probably can’t even make a raft never mind an ark.

Government Departments, along with business leaders throughout the world, have warned businesses that they should be prepared to pay custom duties in the event of a no-deal Brexit. This on the face of it doesn't sound all that bad, but it should be a major concern for all of us, not just small business. This would be yet another increase in costs to be faced such as incurring or responsibilities with regard to employee rights.

Every year, thousands of small businesses see their loan applications rejected by the big Banks, and loan rejection is now a big issue for small businesses, keeping them back from developing. So if they find it hard to get funds to develop, factor in any increase in stock prices, this will have a massive impact on small businesses, who cannot get emergency funds quickly, before Brexit, or the funds to build up stock reserves. Interestingly, the UK's 9 largest banks are now legally required to help business owners find funding elsewhere if they turn down their application for a loan, but shockingly, they do not seem to be doing this. Also, if you get rejected by a bank, it makes it harder to get funding elsewhere. Plus, so called small business grants often do not help established small businesses and tend to be aimed at large industry or big business. If you have any cash flow issues, also kiss any chance of a:- "grant” "goodbye" within most retail or industry sectors. What people have also not yet taken into account is that the minimum wage increases again from April 2019, that's why planning is increasingly required for small businesses.

Sadly, we can see many job losses, if things go very wrong. Major firms have already pulled out of the UK, even some major firms run by Brexit Leaders. Big businesses are major employers and when they go the impact is massive and immediate. Small business closures any causeless obvious waves bur remember these enterprises are the seed corn for future expansion. Are we now heading for more store closures on high street along with many more small businesses who we will need to rebuild the economy, due to the lack of the will to support small business by both Banks and Government? As smaller businesses are unable to stock up ahead of Brexit, paying for stock will be far harder and with banks still profiteering from small and medium sized businesses, by refusing overdrafts and loans, then charging with fees for every 'unauthorised overdrafts,' bounce charges and more, expect to see lots more insolvencies and store closures by the end of 2019. Sadly, this is not 'project fear,' but reality of the uncertainty, and the consequent fall in demand, we see as Brexit negotiations push into the penultimate hours.

Are not the warning signs glowing brighter than ever? The beleaguered high street has taken a very public hit after failing to be able to cope with a mixture of financial pressures, social changes and globalisation of shopping markets via the internet. Already the stock market is all over the place as are currency rates. While it's still not clear how the negotiations will conclude, to the outside world, just as it did when the Titanic got warnings about icebergs, Brexit is on its way and a collision is now looking inevitable.

Small businesses and local firms can't jump ship, as international firms are already starting to do. So, the UK Government must remember that small businesses accounts for 60% of all private sector employment in the UK. Its small companies play a significant role in the growth of the economy and pay more tax that most international companies ever do. So first and foremost, as British SME's are driving record employment levels, the Government must stop messing around and also agree to help small businesses, like they did the Banks, as without them, the UK economy will plummet.

But will the UK Government scrap wage rises, to help businesses, if markets crash? What about the consequences of that? Will the Government force Banks to stop profiteering and block overdraft fees and bounce charges, instead get them to issue loans at sensible rates? Will UK Government give money to small and media size businesses, to help them keep afloat, as they did for the banks over the financial crisis? We think not!

Have we gone too far now to be able to return to port and avoid the iceberg in the unknown Are people really that oblivious to the consequences of their actions, by voting for Brexit, without a clear plan, or are we going to pull the rabbit out of the hat? Let's hope all will work, but please do not leave it too late if you are a small business or employed by a small business. You need to plan now! Work out your crisis plan, just in case the worse does happen! This is not bad practice, but good business management. We can all soften the blow, if we work together, should things go pear shaped. Both employees and business owners must work together and tell the UK Government that small business is the backbone of the UK economy and needs support now, more than ever... Don't bury your head in the sand, get planning now and also make your voice heard.

Please do email us your thoughts on this very divisive topic, to News24@SouthportReporter.Com or send us your them to us via Twitter, using:- '@SouthportReport #BrexitMerseyside'