How Have Britain’s Small Businesses Been Impacted by Brexit?
With Brexit negotiations now in full swing, we wanted to find out exactly how SMEs in the UK have been affected one year on from the vote to leave the European Union.
We surveyed over 500 SME owners to understand how they voted in the 2016 referendum – in which 62% of respondents said that they had voted to stay - and the impact that Brexit has had on their businesses since.
When asked whether the process of leaving the EU had affected their business, 41% of respondents said that it had had a negative impact; particularly affecting product sourcing and services (27%).
Which sectors voted to leave or remain?
According to our data, most of those who voted to remain were from the IT, online and marketing sectors, at a 24% majority. This was followed by 20% of retailers and 10% of the hospitality sector.
Of businesses who voted to leave the EU, it was the retail sector, with 17% of respondents, who had the greatest desire to leave; however, this was a minimal percentage of the overall total.
There wasn’t a clear distinction on whether annual turnover influenced the vote as the majority of SMEs surveyed had voted to remain. However, we did find that businesses with a turnover above £1,000,000 - 30% of total respondents - had voted to leave the EU, which was a greater proportion than any other size of business.
In contrast, amongst businesses with a smaller profit margin, such as micro-businesses with an income below £50,000, the majority (60%) voted to remain.
What were cited as the negative effects of Brexit?
Thinking about the overall impact of Brexit on their businesses, the majority of respondents stated that they hadn’t noticed either any positive or negative effects.
But of those who had experienced change, we dove deeper and asked which specific areas of their business had been negatively affected - such as sales or leads, business relationships, bottom line, business development product or service sourcing, or hiring staff. To this, 47% of respondents said that none of the above had been affected. But 27% did claim that product and service sourcing had been affected the most by Brexit, followed by 24% stating that it was their bottom line that suffered the most.
What have been the positive effects of Brexit?
Our survey participants were also asked which areas of their business had been positively affected since the 2016 referendum, which included the same areas as above. 76% said that none of these areas had been positively affected by the vote to leave; and only 12% of businesses said that sales and leads had benefitted, which was the highest percentage for all the areas listed.
Do SMEs think imports and exports are at risk?
Of the businesses surveyed who import and export, we asked them whether leaving the EU would affect their ability to source products, services or materials at a reasonable price. The results indicated a fairly even split between both sides, as just 52% admitted that they thought there would be a negative impact in one of these areas.