Revealed: What small businesses want from Brexit

According to a new study released by FSB Federation of Small Businesses, few facts have emerged regarding the concerns of small businesses around the country in relation to Brexit. The main concern happens to be trade deals.

The research by FSB revealed that the smaller firms want to have the have the continental option that which means putting a trade deal with Europe at the top of their wish list.

FSB asked 1,758 of its UK small business members for its study regarding their Brexit priorities and they revealed:

 - The exporters, 63 per cent of them shall first prioritize a deal with Europe that shall be followed by US (49 per cent), Australia (29 per cent) and China (28 per cent).

 - 34 per cent of the exporting firms voiced that they will be prevented from trading with EU if a 2-4 per cent tariff was applied.

 - Those who trade exclusively with EU, a large proportion of 39 per cent said that any kind of tariff above 0 per cent shall keep them from doing business with trading bloc.

 - And 1 in 5 which makes 20 per cent say they are contemplating about relocating more or all of their supply chain to the EU.

This study by FSB revealed that small businesses’ top concern was to trade with the EU single market and 63 per cent named this as their first priority. Along with this, another major priority should be to improve trade relations with countries like US, Australia and Canada as these markets shall be the easiest for the small business firms of UK to trade after Brexit due to the similarities in culture and shared language.

Majority of the small firms are already foreseeing how Brexit shall alter their trade destinations. 32 per cent of them expect to export less to EU and 29 per cent think more goods shall be exported to non-EU markets.

Mike Cherry, FSB National Chairman, said that according to the reports, small businesses are very concerned regarding their trade deals which the Government shall be making as component of Brexit. The factors involved in choosing the trade countries are ease, cost and value. These are the key aspects to be considered for any future trade with both the non-EU and single markets.

The single market happens to be critical for most of the smaller business that are carrying out their businesses on limited resources and tighter margins compared to larger companies even when the non EU trade partners are China and US. The changes in the trade scenario will impact them greatly. 

Furthermore, FSB has added they wish that a sensibly phased implementation plan is put into place in order to avoid any ridge after the small UK businesses have left EU. The government is required to support the small businesses to ensure that there is no break in the trade arrangements. 

A friction-less cross border trade should be the aim of the new customs arrangement and greater support should be given to the small businesses which completely enable them to gain full benefits from the future trade deals with the non-EU.

Graeme Donnelly, CEO of London based company formation agent Quality Formations, stressed that there are increasing uncertainties amongst UK small business owners. No one really knows what is going to happen in 2019 and beyond. It makes the general election in June even more important for the future of the Brexit negotiations as well as in tax implications within the UK.