On the 23rd June, the UK voted to leave the EU (often referred to as ‘Brexit’). Many experts have called this development an economic disaster, but others are now arguing that it could prove advantageous to some UK-based companies. Turner Little asks: how could Brexit benefit your business?
Effect on exports
Following the vote, the BBC explains, the value of the British Pound dropped to its lowest level in 30 years. If the Pound falls long-term, it could make imports more expensive, putting companies that import products at a disadvantage. Yet it could prove beneficial if your business is an exporter. The head of UK Forex’s dealing desk, Alex Edwards, explains that “exporters could stand to make serious gains from the Pound’s performance,” because consumers would be able to buy products more cost-effectively, raising demand for the goods you provide overseas.
Reduced red tape
Some British companies have long-accused the EU of imposing too much regulation (also known as ‘red tape’) on UK firms. Vote Leave campaigners argued that Brexit would allow the UK to take complete control of its future. This theoretically means that the British government will now be able to reduce red tape, making it easier for you to grow your company. Commenting, IPSE CEO Chris Bryce was quoted by Start-ups saying that the “new era [of Brexit] must be taken as an opportunity for the UK [with] priorities to cut burdensome regulations on small and micro-businesses.”
Cheaper property
Experts previously predicted that a falling Pound would increase international investor demand for British real estate. This forecast has come to fruition, the Independent writes, as overseas buyers are already rushing to purchase London property. Shedding light on this trend, Dragonfly Property Finance Managing Director Mark Posniak said that “for many overseas investors, buying British property just got a lot cheaper.” Therefore if your business is involved in the real estate sector, Brexit may actually increase demand for your services, allowing you to generate new revenue.
Increased tourism
Brexit could be good for your firm, Start-ups writes, if you operate in the British tourism and hospitality sectors. A weaker Pound means that international consumers will be able to earn more money when converting their currency. This could make the UK a more cost-effective travel destination for foreign consumers, providing you with a stream a new customers. A weaker Pound could also make it more expensive for Britons to holiday abroad, so they may choose to stay in the UK instead, further increasing your potential to profit from Brexit’s effect on tourism.
New talent influx
Critics suggested that Brexit would have a negative impact on companies who hire employees from EU countries. However, others have argued that Brexit could open up your firm’s recruitment options, as it could allow more migrants from countries such as China, India and the US to enter the UK. It has also been suggested that when the UK leaves the EU, it should introduce an Australian-style points-based system for immigration, improving the quality of the talent pool available to your business.
Prepare for Brexit
Therefore, there is evidence to suggest that due to a falling Pound, Brexit may benefit your business by increasing demand for cheaper British products and services. In this climate, it is more important than ever that you have the financial infrastructure required to handle any extra cash inflows that Brexit may bring to your firm. As registered bank intermediaries, Turner Little can provide you with advice on UK banking, ensuring you manage your money effectively going forward.
Turner Little
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.
