Small businesses are worryingly unprepared for the possibility of a no deal Brexit, research has found. The Federation of Small Businesses (FSB) looked into how small businesses were preparing for the possibility, and the findings show a chaotic picture of the post-Brexit UK. Over 1,200 businesses were part of this research that was carried out this month. The whole country is unsure of what is to come with a no deal Brexit, but small businesses need to have a contingency plan in place to avoid chaos.
The research found that only 14% of small businesses had started planning for a no deal Brexit. The possibility looms, yet the percentage of small businesses getting prepared is very small. Around 41% of the businesses believed that a no deal Brexit will have an impact on their business, however, as of yet have failed to get prepared for the prospect.
A small number of businesses, one in ten, think that should a no deal Brexit take place, their business will be affected positively. Whereas nearly half (485) of small business think that they will be negatively affected by a no deal Brexit. However, even this notion has failed to push them to get prepared. The figure of 48% shot up to 66% for businesses that trade in the EU. It was 61% for small businesses that employ staff from the EU.
Mike Cherry, the chairman of the FSB commented: “Looking at this research it is obvious that our small firms are not prepared or ready for a chaotic no deal Brexit and the impact that it will have on their businesses.
“If you sell your products to the EU, buy goods from the EU or if your business relies on staff from the EU, you now see this outcome as a clear and present threat to your business.
“It is deeply troubling that the prospect of a no deal Brexit is seeing many small firms shelving business decisions, pausing investment and more drastically, thinking about cutting staff. These businesses are the growth engines of the UK economy and it is critical that the Government listens to their worries.
Some businesses are stopping business development and innovation because they are unaware of what a no deal Brexit will mean. 35% of small businesses say they will likely postpone big business decisions and innovations. Around 21% reported that they would cut staff and expenditure.
Mike Cherry added: “At this stage, it is understandable that some small businesses haven’t started preparing as they aren’t actually aware of what they are planning for. What we need now is the Government to work with the small business community to ensure that they are adequately prepared and supported if a no deal Brexit becomes a more likely outcome in the coming weeks.