Having lived in a small village all of my life, I am interested to find out just to what extent the implementation of Brexit has or will have on small local businesses. One interesting topic that comes up time and again through research is the issues regarding supply chains and what will happen as a result of Brexit. Businesses supply chains have already undergone a thorough examination during the Covid-19 pandemic as global supply routes freeze to a halt with ongoing disruption looking set to continue. This, along with the threat of Brexit will place businesses under severe financial strain. The uncertainty around the terms on which the UK will leave the EU, what the UK’s longer-term relationship with the EU will look like, how the UK will transition to this end state, what this means for market access, and product circulation and then what all of this will imply for the prospects of individual businesses, is a plethora of issues that both small and large business owners have to contend with in these uncertain times. The majority of businesses anticipate that Brexit will eventually reduce sales and increase costs. The chart below shows the effects that companies expect Brexit to have on their sales, exports, and costs. On average, businesses expected Brexit to eventually reduce their sales by around 3%. The effects on exports were also expected to be negative, while unit costs, labour costs, and financing costs were expected to increase.
Expected impact of Brexit on UK businesses
UK business executives foresee lower sales and rising costs as a result of the current economic climate.
While the main effects from Brexit appear to have come via uncertainty so far, businesses also expect Brexit to lower their sales over the longer term, which is likely to carry important implications for investment, employment, and productivity too. The government has made various arrangements across all policies and industries in the event of a no-deal Brexit, and this includes taxation. Changes to the taxation regime will most impact those small businesses trading goods, and the services industry will see fewer changes. However, there will be some significant changes that will impact on small businesses as we seek to answer the question, ‘What does Brexit mean for small business owners?’ For all small business owners, Brexit and Coronavirus’s twin impacts have meant the last year has been nothing short of a roller coaster ride of uncertainty. The Small Business Britain report from ERC (Enterprise Research Centre) “Looking ahead, small UK businesses will face huge challenges in managing uncertainties and risks in trading. There are opportunities for small businesses to explore more distant markets. However, this is dependent on investment in skills, innovation and technology.” Unfortunately, many small businesses struggle to get by as it is and lack the financial backing to put such schemes into action. Indeed, there is still a negative atmosphere of mistrust amongst small businesses and those in significant power who are in power to try and protect and allow small businesses to thrive. The statistics speak for themselves; 94% of small and medium-size businesses say the Government is ignoring their concerns about how the UK leaves the EU. 94% of 649 owner-managed firms told a survey the Government wasn’t listening to their concerns about Brexit negotiations, or only occasionally listening.
In order to investigate how the dual threat of Brexit and Covid-19 had on my high street, I decided to interview individuals from three respective shops along the village. They were Pappy’s Bakery and Kelly’s Mace. I began with Pappy’s Tommy O’Kane; the owner and chief baker of this establishment. He informed me of just how drastically affected business had been as a result of Brexit and Covid. “Business has been poor, very poor. A lot of the key ingredients that we usually collect from our suppliers Hendersons and McFalls are no longer in circulation for us because of the toll of Brexit. These are key ingredients such as sugar and eggs, and since they are the very essence of baking, without them there is a significant setback to the functioning of the whole business.” He went on to tell me that key factors in the business’ success such as cakes being ordered for parties and the big “Sunday sit in” which generates a lot of profit as the busiest day of the week can’t operate at the minute. Employment has also taken a blow as he informed me that “without orders and people visiting the bakery, there is a less requirement for bakers, and washers, and till staff and so on.” It is indeed a vicious cycle. So how are the other shops faring? Speaking to Claire Kelly and her son Ronan, I was surprised to know that in stark contrast to Pappy’s that business had been booming. Ronan told me that “because almost all of our produce is supplied locally, for example, our bacon we get from Cookstown and our meat we get from Ballymoney. We have only been hit hard by Brexit for certain products such as dog food and dairy items like yoghurts that come over from England.” Claire went on to explain how the family’s initiative and ability to adapt has seen business flourish. “We decided to offer a home delivery service and installed an off-licence. With so many people stuck at home, and all the pubs shut. We are able to take advantage of the pandemic and make significant financial gains.” This sort of innovation that Claire and her family demonstrated is the blueprint that other businesses would be wise to follow, especially in these times of uncertainty over Brexit and Covid stifling small businesses. Adapting to survive is critical in the world of business and marketing, and here we have seen examples of the highs and pitfalls that the various challenges brought into our economy can have on small business owners and their produce.
To conclude, it would seem that the countdown to Brexit is having a significant impact on all businesses, not just the major conglomerate chains but also small, local establishments and it is from paying a visit to these that I have become aware of just how difficult it has been for shop owners to battle the twin threats of Brexit and COVID-19. I have also learned that adapting appears to be the key, as local owners try to overcome the hurdles laid in their path by these uncertain economic times.
