Analyzing Brexit's Impact on Small and Medium Enterprises in the UK

This report analyzes the multifaceted impact of Brexit on small and medium enterprises (SMEs) in the UK. It explores the new regulations, uncertainties, and economic effects stemming from Brexit, considering both positive and negative consequences. The report examines how Brexit has affected export opportunities, capital investment, access to finance, and innovation within SMEs. It delves into the impact on e-commerce strategies, including online sales, pricing, and customer behavior, highlighting challenges such as increased shipping costs and changes in trade policies. The conclusion summarizes the challenges and opportunities created by Brexit for SMEs, particularly in the context of e-commerce and overall business operations, and its implications on the UK economy. The report also addresses the impact on labor markets and the need for SMEs to adapt their strategies to navigate the changing business environment.

ACADEMIC SKILLS PORTFOLIO

Table of Contents
INTRODUCTION...........................................................................................................................2
Main body........................................................................................................................................2
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
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INTRODUCTION
An academic Portfolio is defined as a thoughtful , organised as well as selective gathering
of documents that the indicates the objectives which an individual desired to achieve within
particular time span. Skill portfolio is designed by an individual in order to identify their own
ability as well as talented that has been developed. Objectives of Portfolio is to provide evidence
for formal trial period review, progress or promotion procedures.
The purpose of present research is to identify the effect of Brexit on small medium
Enterprise in UK. It also focuses on analysing the way Brexit have impacted the growth of small
medium enterprises in UK.
Main body
The Brexit have fundamentally developed new regulations related to the way small
business enterprise in UK are to be operated. Brexit has increases the chances of uncertainty
which has major impact on the growth of small firm in UK. It has direct as well as significant
effect on the economic condition of the country whose impact can be judge by measuring the
financial performance of organisation,.But in certain cases there are some positive advantage of
Brexit. The major benefit that has been gained by the small enterprise is that Brexit has provided
export opportunities to small business through which such organisation has able to earn higher
revenue as well profits. The evidence related to the way small medium enterprises are probably
to be impacted, despite the fact that such small organisation are often considered the backbone
of the UK economy (Durbin, Schedlitzki, Adelopo and Warren, 2018)
In UK , there are approximately 72 per cent of small medium enterprise who has
contributed a lot towards economic development of country and generation of employment for
local people .Therefore,the way small medium companies respond to the uncertainty arising
from Brexit has important implications for the economy. The investigator for assessing the effect
of Brexit on small medium enterprise , the survey has been conducted on approximately 10000
small medium enterprises in UK. The support of government authorities have been taken in order
to conduct the survey. The questionnaire has been prepared and circulated through mail , social
media and other sources etc. Several questions related to businesses regarding Brexit and its
probable impact on their future strategic plans. Different actual data often used in economic
forecasts, this has the advantage of being based on the real world views of businessperson.
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It has been identified from the investigation that export oriented as well as innovative
small medium firms were more concerned about the changes which have occurred due to Brexit.
The Brexit has major effect on the competitive strength and innovation skills of such companies.
It has been analysed from the research that Brexit has result in lower levels of capital investment,
decreased in access to external sources of finance, decreased innovative activity and lower
levels of small enterprise growth. Brexit have major impact on the behavioural expectation of
business owner. The entrepreneurs of small medium enterprise are more concerned about the
consequences of Brexit on firm success as well as future growth (Evans, 2017)
The positive impact of Brexit is that the small enterprises those who were engaged in
exports of goods as well activities has able to generate high revenue. Research also demonstrate
that import-oriented manufacturing as well as companies operating in retail industries are most
concerned about the adverse effect of Brexit. Trade deals being negotiated in the outcome of the
UK leaving the single market has negative impact on the profitability of firm. Brexit also have
great influence on the strategies, policies as well as plans of small medium firm (Hadfield and
Hammond,2017)The management team in small medium organisation has planned to obtain
overdrafts, traditional bank loans and credit cards for raising funds which is required for smooth
functioning of organisation. Brexit has also leaded to a higher cost of capital for small companies
and more limited approach to wholesale banking services. There is a actual risk of explosion
unless industries as well as policymakers can work together for identifying the appropriate
solution for benefiting organisation in EU. Brexit has given rise to various other issues such as
cyber attacks, stiff regulations and skills shortages have major as well as direct impact on the
growth of small companies. It also has influence on the productivity and other business
operations conducted by firm. Introduction as well as implementation of trade barriers has
restricted small medium enterprise from entering into new market .It also has great impact on the
labour market as Brexit has restricted Labour in EU to work in UK. Brexit has potentially had
given rise to numerous problems which have direct effect on owner-managed businesses in the
UK, from import and export costs, to approach to labour, grants as well as subsidies. Brexit also
have influence on the objectives of organisation (Brown, Liñares-Zegarra and Wilson, 2017)
Positive impact of Brexit on small medium enterprise is that, it has enabled small
medium enterprise to invest, take on more orders and expand their workforces. The another
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benefit of Brexit is that , it has reduced the competition in the market which has supported
enterprise in developing its focus on business objectives as well as on customer. Brexit. has also
provided companies a chance to restructure themselves ,and increase their competitive strength.
The many of the small medium organisation in UK have planned to developed as well as
maintain their focus on the customer and marketing activities. As these activities will help
business entities in increasing sales and profitability. Some of business owners in small
companies has stated that they have planned to collaborate more with other companies in order
to ensure success and foster business growth (Jacob,Graham and Moller, 2017)
Impact of Brexit on E- Commerce Strategy
E- business strategy of organisation indicates the both short and long term objectives of
business. It provides the outline of the activities which are to be conducted for achieving set
target. Strategic plans are procedure and must respond to both economic and technological
change. Sales of product or services are considered to the most important element in E-Business.
E -commerce provides companies an opportunity to sell goods or services in both domestic as
well as global market.
UK is considered to be as biggest e -Commerce hub who got investment from the
companies or investors in EU. Majority of UK companies engaged in online business activities
sells their goods or services to customer in UK. But due to Brexit , there has been great decrease
in online sales. This factors also have big impact on the prices policies as well selling strategy of
online firms. Recession in the country has great effect on the financial stability as well as growth
of online business (Thompson and McLarney, 2017)
Every organisation whether small or big companies are more concerned about changes
that bring by Brexit will have effect on their business. Companies including online businesses –
are splendidly afraid of unknown changes. It is crucial for small medium enterprise to prepare
themself for whatever changes Brexit bring.
After the Brexit , there has been decrease in the currency rate which have significant
impact on the market. It also great effect on the prices of goods as well as services. In context of
companies, there has been great effect on the consumer behaviour. As the customer those who
prefer to make online purchases from the stores in EU were facing the difficulty. Brexit has
provided E commerce companies an opportunity to increase its sales and profitability. It has also
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provided small medium enterprise to gain customer loyalty and influence customers to buy
companies product. The small medium enterprise in UK can take more benefits by selling goods
as well as services to European and American customers post Brexit. During the Brexit there was
decrease in the Pound rate which has provided companies in UK to gain the transactional benefit
and increase profits.
Brexit has great influence on the buying behaviour of customers. It has result into higher
online traffic which has occurred due to the consumers in UK those who earlier preferred to
purchase goods or services from the stores in EU websites, are now more likely to buy goods or
services from UK companies websites. In other words, Brexit has inspired people to buy
products as well as services from the companies in domestic country. It has also provided
organisations an opportunity to increase its sales , generate high revenue and increase profit
margin.
The companies can take several advantages from Brexit by investing in marketing
activities. As this strategy will assist business entity in generating awareness about companies
products or services and also in getting brand recognition in the market.
The biggest challenge faced by British e-commerce stores is related to increase in
shipping cost which has major effect on the long term business plans of several organisations. As
it has been identified that Brexit also have impact on the import as well as export policies, due to
which business owners who sell imports have to pay additional charges or cost for getting the
supply of goods as well as services. In order to retain their European customers, the U.K. stores
will have introduced flat shipping charges, which will has lead to drastically decline in
companies overall revenue as well as profit margins.
Brexit also had many long term consequences, it has to lead to closure of many online
businesses. Many of the organisations has adopted the strategy to registered their online business
the United Kingdom, so they can sell their products or services in European market (Lloyd,
2017)
Entrepreneurs or manager of the online business is required to formulate new cost
reducing strategies. As this will help firm in increasing profit margins. Brexit also have major
impact on the recruitment as well hiring practices by companies. As before brexit , the
organisation in UK, used to recruit employees at low wages from the European union. As this
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strategy has been adopted by majority of online companies for gaining competitive advantage in
the global market. Brexit , has impacted the payroll in many e-Commerce businesses, because
now firm utilise an affordable labour from other countries.
It is required by online companies to employ domestic employees and utilise online
collaboration tools as well as freelance marketplaces to continue their business operations. Due
to the brexit the trading procedure has become more complicated and many of the companies as
well as customers are facing difficulty in facilitating online and offline transactions. When Brexit
is completed in UK based e-commerce business venture had a competitive disadvantage in
comparison to other companies located outside the UK. After the brexit , there were many
changes in laws related to information technology which has direct impact on the business
operations as well as policies and plans of E- commerce companies.
Service providers who support UK online business are required to ensure that they are
aware of the changes in costs as well as level of uncertainty from their UK client will lead to
new situation or challenges for online business Ventures.
Brexit has also leaded to the abilities of companies engaged in online business activities
to leverage Eurozone digital programmes (Burton,2017)
CONCLUSION
It has been concluded from the report that the Brexit has both positive as well as negative
impact on the growth of small medium enterprises. Brexit also have major as well as significant
effect on the sales as well as profitability of e-commerce companies in UK. The changes which
has occurred due to Brexit , has created challenges as well as opportunities for several firms.
Brexit has big effect on the business operations of small medium enterprise. In addition, to this
the changes in trade practices which has taken place made difficult for online companies to get
the supply of products or services. Political changes has created barriers for organisations as well
as customer to facilitate online transactions.
It has been suggested to the organisation which has been badly affected by Brexit , that it
is required by an enterprise to change their pricing policy as well as market in order to remain
sustainable. The manager in such companies are required to develop effective plans as well as
strategies for dealing with change after Brexit.
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REFERENCES
Books and Journal:
Brown, R., Liñares-Zegarra, J. and Wilson, J., 2017. Brexit, Uncertainty and UK Small and
Medium-Sized Enterprises.
Burton, L., 2017. Digital Life After Brexit. ITNOW. 59(1). pp.46-47.
Durbin, S., Schedlitzki, D., Adelopo, I. and Warren, S., 2018. The value of non-executive
directors to small and medium size enterprises, including a gender perspective.
Evans, N.N., 2017. The internationalisation strategies of small and medium-sized enterprises
(SMEs) clothing suppliers in the UK (Doctoral dissertation, Manchester Metropolitan
University).
Hadfield, A. and Hammond, M., 2017. Kent and Medway: Making a Success of Brexit: A
Sectoral Appraisal of Small and Medium Sized Enterprises and the Rural Economy.
Jacob, A., Graham, L. and Moller, A.K., 2017. Implications of Brexit to the Asia-Pacific region:
with a focus on least developed countries.
Lloyd, I., 2017. IT Law in the United Kingdom after Brexit. Computer Law & Security Review,
33(2). pp.182-192.
Mallett, O. and Wapshott, R., 2017. Small business revivalism: employment relations in small
and medium-sized enterprises. Work, employment and society .31(4). pp.721-728.
Thompson, J. and McLarney, C., 2017. What effects will the strategy changes undertaken by
next Plc have on themselves and their competition in the UK Clothing Retail Market?.
Journal of Commerce and Management Thought. 8(2).pp.234.
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