Business leaders in Cambridge are more likely to report growth than their peers in London despite some of those surveyed reporting a negative impact from Brexit on their businesses, according to research by Price Bailey, the Cambridge-based accountants. The research was unveiled at an interactive panel discussion at the Wellcome Genome Campus, Cambridge, attended by over two hundred business people.
According to the research, 64% of Cambridgeshire businesses surveyed grew financially over the past year. That compares to 42% of the business owners surveyed across London who reported financial growth.
Despite the improving financial performance and optimism of the Cambridgeshire business leaders questioned, 28% reported that Brexit has already damaged their businesses compared to just 14% who said that Brexit had been positive.
The research, Inside the Minds of Business Leaders, was undertaken by Ipsos MORI and involved interviews with 200 local business leaders across the East of England and London on a variety of issues ranging from Brexit, business confidence, growth and exit strategies and other key challenges. 50 Interviews were conducted in Cambridgeshire.
Martin Clapson, Managing Partner at Price Bailey, comments: “The businesses in Cambridgeshire we surveyed reported significantly better financial performance and tend to be more optimistic about growth than their peers in London. This is positive but those business leaders who said Brexit is having a negative impact cited the devaluation of the pound as a major concern, which for many will have meant increased costs that they must absorb.”
“Nearly three fifths of the Cambridgeshire business leaders we questioned transact no work outside the UK. This leaves them disproportionately affected by the fall in the value of the pound and, unlike exporters, unable to benefit from the competitive advantage the cheap pound confers in overseas markets.”
He adds: “Three fifths of the Cambridgeshire business owners we spoke to said that finding and retaining people is a concern, compared to just over half in London. Organisations which can offer flexible and remote working are more likely to keep their best people, which is why the development of infrastructure, such as broadband and mobile phone networks, are so important in rural areas like Cambridgeshire.”
According to the Price Bailey research, when asked what the one thing they would like to see the Government do to support businesses in Cambridgeshire, just 10% of those leaders sampled said, ‘reverse Brexit’. The top priorities were ‘reduce legislation/cut regulation’ (20%) and ‘reduce the tax burden’ (16%).
Martin Clapson says: “While some Cambridgeshire businesses have suffered from the fall in the pound, the business leaders we sampled suggest that there is little desire to reverse Brexit now the process is underway. Businesses have more immediate concerns, such as red tape and the tax burden. If the Government were to focus on these concerns, the negative impact of Brexit could be partially offset.”
Only 44% of Cambridgeshire business owners responding to the survey have a business plan they regularly refer to and update
The research also shows that just 44% of Cambridgeshire business leaders responding to the survey have a plan that they regularly review.
Martin Clapson says: “A business plan is an important document for owners who want to manage their organisations more effectively. It is doubly valuable during a period of economic uncertainty, such as we are experiencing now. A business plan can lead to better investment decisions and help with cashflow management, which can put a business in better shape for negotiating economic headwinds, such as the depreciation of the pound or interest rate rises.”
He concludes: “Under a fifth (18%) of Cambridgeshire businesses we questioned have an exit plan yet succession planning is one of the major headaches for owners. Many owners balk at the idea of having an exit plan at the outset but a properly considered and executed plan can make finding a buyer a quicker process and significantly enhance the sale value.”
The event at the Wellcome Genome Campus was marked by a panel discussion featuring James Sproule, former Chief Economist and Director of Policy at the Institute of Directors, and Tim Pike, Deputy Agent for the South East and East Anglia at the Bank of England and Caron Bradshaw, Chief Executive of the Charity Finance Group.