It doesn’t matter how you feel about the referendum result and the decision to leave the EU. There is no question that it will have a drastic impact on the UK economy and, in turn, on small businesses and people trying to start a company after Brexit. Now that the UK has left the EU and is no longer officially a member of the European Parliament, the economic chaos caused by Brexit and turn of events has created a substantial amount of uncertainty for entrepreneurs looking to start a company after Brexit.
It is evident that Brexit has had a significant impact on the united kingdom economy, which therefore scares people looking to invest in a new company. But don’t think about it! If you have the same misgivings, here’s our guide to starting a company in the post-Brexit 2020 market.
Should You Start A Business After Brexit?
The current environment of uncertainty could lead you away from starting a business in the United Kingdom right now. However, there are still many factors that make the United Kingdom a desirable market for entrepreneurs.
In support of our financial culture and technology market, the study conducted by the Legatum Prosperity Index places the UK above France and Germany as the best place to start a company:
Indeed, its entrepreneurial tradition is one of the powerful hands that the United Kingdom can rightly claim in the midst of the Brexit. The Minister for Small Business, Margot James, recently acknowledged the need to encourage entrepreneurship. “This government is committed to ensuring that the UK remains the best place in the world to start and develop a business,” she said. “This means finding and then encouraging such high-growth companies to scale up, go internationally, and invest in their future.”
What Do Business Owners Think About Starting A Business After Brexit?
What happens to the UK post-Brexit remains a source of debate, and business owners are deeply divided. According to Informi’s study, 37% of company owners claim that it will make it harder for them to succeed, while 33% take the opposite view and assume that it will make it simpler. There are a lot of people who just don’t know. And who can fault them for that?
Another interesting survey conducted by Statista in 2019 shows that 16 percent of the participating business owners are planning to relocate their business to another location, while an incredible 62 per cent are not planning to relocate their business to another location post-Brexit.
Step By Step Guide To Starting A Business After Brexit
1. Finding An Idea
There’s no need for a business concept to be exceptional or original. What counts is that there are enough customers who would pay for your product or service to make a profit and make a living for you. Depending on your goals, you may also want to know whether your company is scalable.
The economic or political implications that will follow will not change these factors when deciding to start a company after Brexit. Businesses that have already met the public’s needs will always be in demand. What can shift is how much pressure external factors bring on your ability to make a profit. For example, previously successful companies that depend heavily on imports are likely to have to increase their prices, which could then have an effect on consumer sales. Conversely, there will be possibilities for companies to meet the new needs posed by Seveso.
2. Writing A Business Plan
If you’re planning to start a company in the post-Brexit period, writing your business plan is the first step towards making your concept a reality. It’s an opportunity to examine every aspect of your sector and outline your overall vision, backed up by concrete goals and strategies. This information can be critical to helping you gain the confidence of potential investors and key stakeholders.
3. Funding Your Business
Unless a low-key operation, most start-up companies would require some sort of cash injection to cover initial start-up costs. The good news when it comes to choosing to start a company after Brexit is that there are a lot of places to go to for support, and this is unlikely to change even with Brexit. Borrowing from the bank or your family and friends is a safe way to try it initially. However, several non – conventional routes are now available to start a company. Peer-to-peer (p2p) lending and crowdfunding have also opened the door to entrepreneurship, and a vast number of government grants are eligible, ranging from cash awards to credit facilities.
One thing to bear in mind is the possibility that the Bank of England will increase interest rates in the next few years. Analysts consider this very likely to happen, so make sure you’ve taken into account your predictions if you’re borrowing money.
Another main factor, of course, is the exchange of money. Are you planning on importing or exporting as part of your business? Any significant or frequent foreign payments will be subject to ever-changing exchange rates – and the market is unpredictable right now, so keep an eye on the latest exchange rates and seek advice from a professional to make the most of any payments that you need to make now and in the post-Brexit era. You’d be shocked at the difference it could make to the bottom line of your company.
4. Setting up
A big expense to factor in when preparing to start a company after Brexit is where you can base your operations. If you need to be situated in a commercial premises, you would need to find and pay for a place of some kind. A cheaper option is to find a co-working room or, better, cut your expenses entirely and run your company from home. Although you would think you need premises, there are a lot of costs involved, not least the burdensome business rate tax, which you will potentially eat in the bottom line as well.
If you need to employ a staff members, you should also consider the effect it has already been having on recruitment. Industries that are heavily dependent on foreign labour, such as agriculture, have already reported a drop in numbers, and this is likely to increase as controls are strengthened after Brexit.
5. Branding and marketing
Creating a popular brand is not going to happen overnight. However, the foundations should be set in place when you’re setting up your company for the post-Brexit era. Who are your clients? What is your USP (unique selling point)? Why are you the best person to solve these problems? These are all the things you’re going to think about when you write your marketing plan, and now they’re going to really help you shape your brand identity.
Choosing a name and a company logo is a vital part of your brand identity. But you’re still going to have to think more broadly about the main messages you want to communicate and how to express them. The latter point, your tone of voice, should be a thread across all your marketing activities and give it a consistent feel. From here, you will be in a great position to build your digital presence, i.e. to set up a website and social media profiles. Only after you have these items in place do you start spending more money on ads.
You’re almost there. There are, however, some admin and finance-based tasks that you may need to do before you start a company after Brexit. One of the most critical is the legal structure you choose. If you set up as a sole trader or a limited company will have a big effect on your tax and regulatory obligations – so it’s worth talking to an accountant. They can also help to advise you on setting up an accounting system to monitor payments entering and exiting your company.
Finally, you would also want to define internal procedures, such as your payment terms, and familiarise yourself with key financial records, such as delivery reports, invoices and budget sheets. Not the most enjoyable jobs, but you’ll be glad once your company is up and running.
Yeah, you’ve got there. Your guide to know what it’s going to take to start a company in the post-Brexit era. Not really that different from before, only a little worried about what’s around the corner.
And, as Winston Churchill aptly put it, “The pessimist sees the difficulty in every opportunity; the optimist sees opportunity in every difficulty.” Now, there’s the spirit.
9 Business Ideas for a Post-Brexit World
So much of the news about Brexit, and in particular the effect of Brexit on business, was, well, not exactly cheerful. (Some might say outright doom and gloom, while others would say hysteric.) And while there are specific problems that need to be discussed and planned for, a lot of companies are seeing good opportunities in the midst of Brexit.
This article discusses only a few of the possible opportunities that companies in the United Kingdom (UK) should be able to take advantage of as a result of Brexit.
Note that some of these are short-term opportunities, while others can take longer to pay off. And some of them may be more important to your business than others. There are no one-size-fits-all strategies. It is entirely up to you to pick and choose the ideas that will add the most value to your company.
Choose a few ideas that you think best relate to your business, taking into account the scale of your company, your skills, where your company is in its life cycle, and the broader industry in which you work. Having found the most appropriate opportunities, you can then explore them further.
Will Brexit Open Up New Markets Outside Of The EU?
If you’re already exporting products outside the United Kingdom, or if you’re looking forward to exploring markets outside the United Kingdom, Brexit could provide a welcome boost. Or, more precisely, the devaluation of the pound resulting from the Brexit uncertainty may help improve your export sales.
Note that a weakened pound tends to benefit businesses that export goods overseas because it makes UK products cheaper than those manufactured in countries with stronger currencies.
Consider imports of cheap Chinese steel as a reverse example of this. Even if the commodity comes all the way from China, it can still be cheaper than British steel since it costs the Chinese steelmaker less than the British manufacturer.
Will Brexit Increase Domestic Demand For Products And Services?
What’s the other side of cheaper UK exports becoming more appealing to international buyers? Imports from outside the United Kingdom are becoming more costly for UK companies and customers.
Of course, if you import parts or goods from abroad, this will give you some problems in terms of profitability and in this case you may want to trade more with UK partners. But, on the positive side, increasing import prices will bring great benefits.
Note, as foreign products become more costly (perhaps due to currency fluctuations or trade tariffs), consumers prefer to look closer to home for goods and services. In other words, the company will be more competitive than international firms.
Brexit Will Lead To Reduced Regulation
The United Kingdom is likely to remain very closely aligned with the laws of the European Union ( EU). However, in some cases, post-Brexit changes to regulations and standards could provide UK companies with more independence and flexibility than EU rules.
Note that decreased regulation will make your business processes simpler and faster, and could potentially reduce your overheads and costings — all of which could make your company way more competitive.
Help Solve Your Customers’ Brexit-related Problems
If you have struggled to understand the implications of Brexit for your company, it is safe to assume that some, maybe even all of your customers (and potential customers) could be in the same boat.
Consider if there is a business opportunity for you to give your customers tailor-made Brexit services. Ask yourself, “What are our customers dealing within the sense of Brexit, and how can we help them solve these problems?
Now, that doesn’t mean that you can set up a new company as an all-singing-all-dancing Brexit consulting service (though, for those who have the expertise and experience, this will probably prove very useful in the short term). This means, instead,
Customising your services and products in line with the “pain points” of your clients, such as access to labour, VAT, cash flow, stockpiling of supplies, searching for investment, and whatever else.
Tweaking your marketing campaigns to highlight how your company is ready to help customers conquer the hurdles of Brexit.
For example, if you’re an accountant working mainly with small and medium-sized businesses, your clients can need extra support to consider future VAT changes — in which case, you’re there to direct them through changes and help them incorporate new processes.
Or, if you operate a law firm concerned with employment law, you’re in a strong position to help local companies who hire employees outside the United Kingdom remain on the right side of the law.
If you are a business coach or a consultant, your clients may be looking to develop new growth strategies for their company or to update their business plan in the light of the changes of Brexit.
Note that this approach is relatively short-term, but you may find that it pays long-term dividends. By positioning your business as more organised and diligent than your rivals, you have the potential to gain market share and increase the profile of your brand.
Brexit Could Be Your Opportunity To Build A Great Reputation As An Industry Leader In Your Sector
In addition to enhancing the profile of your firm, it may also be an exciting career opportunity for you.
If possible, collaborate with those outside your own company to explore the effects of Brexit, remain in the loop to respond to the industry, and improve your personal network.
Here are only a few ways in which you could theoretically increase your personal profile within your industry in the light of Brexit:
Engage on a larger scale beyond your sector by joining the Brexit committees set up by your trade association or other organisations in your industry. If the government needs engagement and consultation in your area of expertise, consider getting involved.
Publish on-line posts and white papers, setting out how the business is coping with the consequences of Brexit and keeping ahead of the game.
If you work in a large corporation, you can volunteer to represent the company in business committees and working groups, or provide reports to the company’s leadership team about how your department handles the effects of Brexit.
Brexit Could Create The Perfect Opportunity For Businesses To Take Advantage of Process Automation
Increasing automation is a major business problem, primarily due to huge strides in technology, robotics, artificial intelligence, and so on. If your organisation has not even looked at the possibilities for automating processes and tasks, it’s a good time to start.
Looking at the possibilities for automation is a bit like renewing your car insurance. We all know that we shouldn’t just stick to the current system and embrace the renewal offer from our current insurer; we know that if we spent half a day calling around hundreds of insurers, we might get a better deal somewhere. But, when the renewal time comes, how many of us take the simple route and stick to the status quo? Come on, You’re a friend of mine, be honest.
Think of pursuing automation as being required to renew your car insurance “the right way.” Sticking with the current system is not an option, not unless you’ve already done your homework, and you’re sure there’s no better option out there.
Note that automation can be especially important if your company depends on overseas labour to perform essential business functions. If recruiting British staff is not a viable choice (some industries are struggling to hire locally and need to look further afield), then automating such processes could be an inevitable long-term strategy for your sector.
You may think that automation applies only in the manufacturing or agricultural setting, but think again. A wide variety of business processes are increasingly being automated across all kinds of business functions, including HR, manufacturing, marketing, and finance. For example, in sales, the software can now automate lead prioritisation, schedule appointments, and recording follow-up activities.
Automation does not simply mean taking jobs away from human employees and giving them to computers. In many cases, automation actually enhances what human workers do by helping to streamline processes. And when the human employees are liberated from more trivial, routine tasks (such as arranging appointments), they have more time to concentrate on activities that directly benefit the company.
Therefore, use Brexit as an opportunity to study your business processes and see if you have the ability to simplify and develop processes. If you are a true believer in work-life balance and passive profits, you can continually review processes in your company to see what can be achieved faster, for less money and far easier with the use of software or newly-designed systems.
Brexit Could Lead To Significant Investments From Overseas Investors
There is a growing sense that international investors have been holding back from investing in UK real estate development ventures in the light of the Brexit uncertainty. In other words, there is potentially a huge backlog of foreign investment just waiting to pile up on the UK property market after the dust settles, particularly as the pound is weak and investments reflect better value and yield.
There are hints of a broader fall in foreign investment. Figures from the Organization for Economic Co-operation and Development (OECD) show that foreign investment dropped 90% in 2017, after the 2016 bumper. This is clearly a short-term problem, but the long-term picture is more optimistic, with many assuming that foreign investment is going to flood back into the country after Brexit.
Why will foreign investors want to invest in UK companies and projects? Simply put, since a weak pound means that their money is going further in the UK. They’re getting more bang for their buck (or euros, or whatever) and the UK remains basically an excellent investment spot. Thus, when short-term volatility is over, foreign investment is likely to pick up speed.
Brexit Is The Perfect Opportunity To Pick Up Work From Companies That Left The UK Because of Brexit
In the event that a direct competitor withdraws from the UK, consider whether there is a chance to absorb some of their profits. This may include, for example, the purchasing of their client lists (where possible), ads to their target audience, or even the acquisition of the UK arm of an EU business.
Take the UK fishing industry in particular. If the EU countries lose the right to fish in British waters after Brexit, this will give the UK fleets a much fairer share of fishing rights. (In 2018, EU fleets landed eight times as many fish in UK waters as British fleets landed in EU waters.)
If you’re a fisherman or a financial advisor, if your rivals leave a void to fill, make sure your company is the one that fills it. Be prepared to increase the market share and draw new customers.
The Will Likely Be A Lot of Homegrown Support For British Businesses In The UK
In the United Kingdom, many see Brexit as an opportunity to become more self-sufficient, to prefer domestic options over imported goods and services. (The agricultural sector, the term ‘homegrown’ is very important because imported food is potentially more expensive.)
That’s not just about Brexit, though. For all kinds of factors, like climate change, more and more people think “local” rather than “national.” Local manufacturers, local suppliers, local services — all give consumers, retailers and buyers the ability to feel more connected to the businesses they work with.
People in the United Kingdom want to help UK companies. If you’re a local alternative to faceless, corporate corporations, don’t be afraid to say that!
The Brexit Vote: What Are The Key Elements Behind the Withdrawal Negotiations?
Uncertainty has emerged as a result of the Brexit referendum. Many people are speculating about what ties would look like in the post-Brexit world. To get a better grip on what to expect, let’s take a look at the main elements behind the Brexit vote.
The withdrawal talks between the United Kingdom and the EU appeared to go on forever, but they are only just the tip of the iceberg.
This is because the withdrawal arrangement only includes the exit of the United Kingdom from the EU. It does not agree on the essential elements of the potential relationship between the two, such as trade. The withdrawal agreement is clearly about getting the United Kingdom out of the EU in an orderly manner.
Trade negotiations — and partnership arrangements in areas such as security and defence — will not begin until the United Kingdom has left the EU. This was a major area of confusion for a lot of people who thought that the “Brexit agreement” was actually a trade deal.
So, what is this orderly exit? In order to ensure that the UK exit will be as smooth as possible, the two sides agreed on the following main points as part of their withdrawal agreement for Brexit:
The UK’s transitional period (also known as the implementation phase) which is intended to ensure a managed transfer and to allow governments and businesses time to plan for post-Brexit life.
The rights of European citizens who are already living in the United Kingdom (and the rights of British citizens living in the EU) to maintain their resident status in the post-Brexit era. In addition, the free movement of citizens will continue until the end of the transitional period. During the talks, Theresa May made it clear that the free movement of people would have to stop after the transition period — that was one of her “red lines” that she declined to move on.
The fact that the United Kingdom will have to abide by EU legislation for the duration of the transitional period — a fact that has raised a lot of eyebrows among those who voted for Brexit.
And, how to avoid a hard border between NI and the Republic of Ireland. The withdrawal agreement includes a provision for a temporary customs union between the United Kingdom and the EU before a trade agreement has been reached, and this is known as the Backstop plan, which has proven to be highly controversial among the Brexiteers (and even many Remainers) even though it was intended to avoid a hard border and maintain peace on the island of Ireland.