I campaigned for Britain to vote Remain during the EU Referendum as I believed it would be the best option for trade with our biggest market, would protect and grow foreign direct investment here and because it best met our geo-political needs. My concerns around the UK leaving the European Union were that customs procedures and would be re-imposed, which would make doing business with the continent a bit more difficult and would increase transaction costs. Making market access more difficult would most likely put off some foreign investors from investing here in the future.
Now that we have voted to leave, the result should be respected and we need to make the best of the situation. I believe the Prime Minister is totally correct not to rush into triggering Article 50 which would set in train a two year notice of departure from the EU. We need to formulate a negotiation strategy first and that’s very complicated! The Prime Minister knows that she has to strike a balance between protecting our trade with Europe and being able to assert some measure of control over immigration, repatriating the money we currently give to the EU and taking back sovereignty over areas of law controlled in Europe.
Exporting has been in my blood since my early years; my father started RH Freight, a successful freight company in Nottingham in 1971. In 1995 I took over as Managing Director of the company and subsequently bought out family interests with my youngest brother. During my time as MD, I built up the business to be the market leader for European freight expanding turnover from £30m to £150m and running the business successfully until its sale in 2011 to Kuehne & Nagel, for more than £60m. After a bit of time out I returned to form Baxter Freight in 2014. We now have 50 staff and turnover of £10m.
The recent Brexit decision presents a greater challenge to smaller businesses than larger corporations in my opinion. Bringing back custom clearance procedures will make things more complicated and add cost. Bigger companies will find it easier to handle this challenge and, frankly, can always switch their production to inside the rest of the EU if things don’t work out so well.
Smaller companies need to remain hopeful that we can strike a good trade agreement with the EU, they need us as much as we need them. They also need to ensure they are fully familiar with new customs regulations if and when they emerge so no surprises hit them. There is no need to panic but they should be focused on these points. In the meantime the pound has fallen by 15% against the Euro this year which makes British goods much more competitive than they were. So in the short term at least Brexit has given British exporters a boost and they should capitalise on it.
At the same time, it’s clear that Britain will be making free trade agreements of our own in the future. It’s easy to imagine that the forerunners of this will be Commonwealth countries such as Australia, Canada, New Zealand and Singapore. I expect the United States to follow in due time. For small businesses looking to start exporting this could be an ideal time to start exploring these markets as they may have greater potential for exporting in the future than they did prior to the Brexit vote.
Small businesses should look at expanding into exporting as a way of placing their product in a larger market – it would be relatively easy for them to tap into overseas markets that would give them endless scope for growth. Some countries may be less competitive than the UK allowing small businesses to earn greater profits. Developing countries will almost certainly have greater growth potential in almost any product. To me, it’s vital that small companies test the mettle of their own products overseas; it is a key indicator of the growth available to your business. They’ll do well if their offering is competitive, if not you can bet it won’t be long before better products are overwhelming yours at home as well as outside the UK. I believe British small businesses should take the battle to their foreign competition by trying to capture their local market share.
Throughout the Brexit campaign the issue of trade relations between the United Kingdom and Europe played a major role. The possibility of UK trade between the EU and nations further afield gripped headlines and has plagued us with uncertainty about our post Brexit position. Now we are on the other side of the vote, it is time for the UK to start planning where we go from here. The vote has provided ample opportunities for small businesses to start seriously considering exporting. SMEs should take full advantage of the weakened pound as foreign interest has increased, and it could be a financially beneficial time for your business even bearing in mind the risks a “hard Brexit” might bring to the UK.