Over half of business leaders surveyed see the devaluation of the pound resulting from the Brexit vote as a major worry for their businesses, according to research by Price Bailey. The research was unveiled at an interactive panel discussion at the Institute of Directors in London attended by two hundred businesspeople.
According to the research among 200 businesses in London and the East of England, 35% have already felt a negative impact from the Brexit vote. Just 10% of UK businesses questioned reported a positive impact from the vote.
52% of the business leaders responding to the survey cited the devaluation in the pound as an important concern over the past year.
Despite concerns over Brexit, 57% of the business leaders questioned reported that their businesses grew financially over the past year. Only 11% of those sampled said that the financial position of their business will get worse over the next year.
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.
Martin Clapson, Managing Director at Price Bailey, comments: “The majority of businesses we surveyed are growing and expect to continue to do so, despite concerns over the economy. This is positive but almost two thirds of those business leaders who said Brexit is having a negative impact cited the devaluation of the pound as an important concern, which for many will have meant increased costs that they must absorb.”
“Over half of the business leaders we questioned transact no business outside the UK. This leaves them disproportionately affected by the fall in the value of the pound and, unlike exporters, unable to take advantage of the competitive advantage the cheap pound confers in overseas markets. Just a third of businesses who currently export expect to export more to non-European countries once we leave the EU, which suggests that the Government faces a difficult challenge if it wants to increase the UK’s trade with the rest of the word and rebalance the economy towards exports.”
He adds: “Over half of the business leaders we spoke to said that finding and retaining people is a concern. Businesses 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.”
According to the Price Bailey research, when asked what the one thing they would like to see the Government do to support businesses, just 7% of business 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 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.”
Nearly half (47%) of business owners responding to the survey do not have a business plan they regularly refer to and update
The research also shows that nearly half of business owners responding to the survey (47%) do not have a business plan that they regularly review.
Martin Clapson says: “A business plan is an important document for owners who want to manage their businesses 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: “Around a quarter (24%) of businesses we questioned have an exit plan yet succession planning is one of the major headaches for business owners. Many business 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 Institute of Directors in London was marked by a panel discussion featuring James Sproule, former Chief Economist and Director of Policy at the Institute of Directors, Tim Pike, Deputy Agent for the South East and East Anglia at the Bank of England and Anthony Ward, founder of Armajaro Asset Management.