I’ve been told that nature abhors a vacuum; empty spaces go against the laws of physics.
A more fitting saying for anyone running an enterprise of their own is that business loathes uncertainty. Anything that makes the future harder to predict, growth less assured and planning tougher is bad news.
Especially – you would argue – for organisations that don’t necessarily have the scale and size to support themselves through tougher times. Even medium-sized businesses don’t always have the reserves in store to see them through a necessary change of course in choppier waters.
The recent UK vote to leave the European Union has – to say the least – thrown a spanner in the works of forward planning for businesses large and small. Whatever the political motivations behind the result, it has made predicting the future that bit harder.
But without a shadow of a doubt, small and medium-sized enterprises (SMEs) appear to be facing up to the challenge head-on.
Back at the end of 2015, we asked owners and decision makers at the UK’s SMEs what their biggest concern was about the following twelve months. The answer came back loud and clear: Brexit - both the uncertainty this might cause and the headache to longer-term planning.
Today, it’s a very different picture and SMEs are evidently in more upbeat spirits. When we went back to survey this community again in mid-July, shortly after the result on 24th June, we found two key points:
- Almost half said this news will not cause any significant disruption to their business.
- Over two-thirds feel either as confident or more confident about their business than they did 12 months ago
Many of these businesses are no stranger to adversity, having weathered the last downturn. As a result, they are savvy about cutting their cloth to reflect the times. They know that to survive they need to adapt to the current operating environment.
Safety in numbers
Our message to SMEs has always been – and always will be – that size is their advantage, but their strength is in numbers.
They are nimble enough to adjust quickly when the situation demands it, as well as work with each other. Finding the right partners, adjusting their networks and working with people who can help them turbo-charge growth, innovate, or help them trim costs and focus on core activities.
There is no doubt there is still work to be done. No surprise then that SMEs want at least six months’ breathing space to get their house in order before Article 50 itself is triggered.
Many will be making adjustments in this period to tackle this less certain future. Over a third in our survey expect their costs to increase as a result of leaving the EU and around the same proportion predict a hit to their revenues. But overall, the majority confidently indicate that they do not expect any change to their costs, revenue, capital expenditure or investment in their people as a result of this move.
Small businesses are a critical part of UK Plc. It’s reassuring to see that they want to continue their rich heritage of agility and remain positive about whatever an unpredictable world throws at them in the coming months.
Long may this continue. Because if there’s one thing that’s certain, it’s that uncertainty will always crop up in one form or another.
By Patrick Gallagher, chief executive of CitySprint