I think it’s fair to say that 2016 could be categorised as an eventful year, in political terms. The Brexit referendum, a new Prime Minister, and a disjointed and divided opposition party have all contributed to a general feeling of uncertainty, and that’s without considering the craziness of the current US Presidential election.
It has felt particularly unsettling for small businesses. Uncertainty is the true enemy of small businesses, making planning and growth far more challenging than they would ideally be. My company works exclusively with small businesses, in the UK and across Europe, and the lack of planning for a post-Brexit UK has been keenly felt. What’s the secret to navigating these stormy political water for startups?
Don’t mention the B word…and diversify your customer base
It is hard to avoid Brexit. It dominates political and economic thinking and many in the business community are still coming to terms with what is perceived to be a disastrous step for UK commerce. The Treasury itself has warned that Britain will lose up to £66 billion a year if the government pursues the ‘hard Brexit’ option of leaving the single market
Retaining access to the single market should be the main focus of any Brexit planning – it is incredibly important for the small business community to be able to trade without restrictions with far and away the UK’s biggest trading partner. But in the absence of any firm commitment to remain part of the single market, small businesses must protect themselves against uncertainty as best they can.
Continue trading with Europe of course, but it’s also the perfect time to consider alternative markets for your products or services. Launching in another territory is not straight forward, but given the uncertainty around the EU it makes absolute sense to try and diversify your customer base.
Ramp up internal training
Retaining single market access was one of the platforms on which this government was elected, but from witnessing the recent party conference season, it would appear that taking an extremely hard line on immigration has taken priority. It was even suggested that firms should be made to list the amount of foreign workers they employ, which felt like a return to much darker times, and was thankfully shelved after a storm of protests.
But there can be no doubt from the political rhetoric that the freedom of movement that has played such a prominent role in many startups’ success, is under significant threat. The past five years or so have seen London emerge as Europe’s most prominent fintech hubs, with 60% of all European fintechs based in the UK.
This success is down to a number of factors, but one of the most significant is the access to talent from across Europe. Whether it’s entrepreneurs, developers, marketeers, designers or something else, this workforce has made a major contribution to UK fintech and without it, it’s highly debatable whether such success would have been achieved.
So fintech firms (and indeed other startups and small businesses) are going to have to learn to work around the restriction of worker movement. Now is the time to ramp up training where possible, giving your workers additional skills in a time when they will be required more than ever.
Be bold through the uncertainty
Despite the fact that uncertain times aren’t pleasant for anyone, they are also the times when it’s possible for a startup to gain a significant advantage: rapid decision making and adaptable people mean that a well-run small business can come out of a period of economic trouble much stronger than when it went in.
If your competitors are being cautious in their plans – expansion, recruitment, acquisitions – then this is a real opportunity to steal a march by being decisive. You may be able to hire better people, to identify acquisition targets and even to win new customers. If your competitors are hunkering down and seeing how the Brexit situation and other current political uncertainty plays out, then you can take advantage.
The last decade has seen the UK become more entrepreneurial than before, and small businesses afforded a status denied to them previously. The political situation can dampen that progress, but only if we let it. Small businesses must be bold and plan for the future, and in doing so will enable them to ride out the present uncertainty.
By Martin Campbell, MD, Ormsby Street