Region’s small firms reluctant to prepare for Brexit – new report
Published: Wednesday 02 Oct 2019
A gap in Brexit readiness across businesses in the West Midlands is revealed in a new survey.
A Business Brexit Health Check report shows that micro businesses are the least likely to be ready for withdrawal from the EU while larger firms have taken steps at board and senior management level.
The Health Check is delivered by the West Midlands Combined Authority (WMCA), Greater Birmingham Chambers of Commerce (GBCC), Black Country Chamber of Commerce (BCCC) and Coventry & Warwickshire Chamber of Commerce (C&WCC).
It has been designed to produce bespoke information for businesses, highlighting areas of their operations that are exposed to Brexit-related change, tips on preparing and information on support available. Key findings include:
- On average, large firms identified over three times as many areas of their operations that could be impacted by Brexit than micro businesses (4.7), small (8.7), medium (10.9) and large (14.5)
- Brexit preparedness" varied significantly by organisation size. Micro businesses are the least likely to report having undertaken proactive steps to prepare for Brexit and large organisations the most
- Seventy-one per cent of large and mid-sized organisations reported that the potential impact of Brexit on their organisation had been discussed at board and senior management level compared to 62 per cent of small firms and 41 per cent of micro firms
- Larger firms are more likely to be impacted by any changes in regulatory bodies or the regulation governing goods than small and micro firms. Thirty-nine per cent of large organisations and 22 per cent of medium-sized organisations trade in goods regulated by an EU agency compared to five per cent of micro firms and 11 per cent of small firms
- Over a quarter of micro firms and over half of small firms in this sample purchased goods from the EU and almost a quarter of micro firms and nearly a third of small firms sell goods or services to one or more of the 50 nations that the EU has trade agreements with
- All firms were most commonly exposed to Brexit-related change through their people (pension arrangements, professional qualifications, business trips and EU nationals in their workforce) and trading relationships (buying from or selling goods to other parts of the EU)
Mayor of the West Midlands Andy Street said: Brexit will bring challenges and opportunities for all businesses and while this research shows bigger companies are starting to prepare it's clear that some smaller firms remain hesitant.
Yet micro businesses are a key part of our economy and have helped make the West Midlands the UK's fastest growing region outside London and we want to maintain that success.
So as the clock continues to tick towards October 31 I would urge all businesses to prepare by using our Business Brexit Health Check if they haven't done so already
Paul Faulkner, chief executive of the GBCC, said: It is clear from these results that the business community as a whole still does not feel significantly well prepared for Brexit. And with uncertainty and mixed messages prevailing on everything from the date to the potential impact of Brexit, it's not surprising.
However, while too much of Brexit still remains uncertain, every business can explore how they are exposed to Brexit-related risks and, where possible, take steps to reduce their exposure to those risks (in ways proportionate to the size and nature of their organisation).
We know that many businesses are limited in the time and resources that they can invest in preparing for Brexit. Together with our fellow Chambers and the West Midlands Combined Authority we are continuing to deliver resources, events and support to help businesses navigate Brexit, which I would encourage businesses across the region to make use of
Louise Bennett, chief executive of the C&W CC. said: The latest report demonstrates the need for all businesses, large and small, to scenario plan for Brexit. The Business Brexit Health Check is an excellent resource to help companies start this process.
Brexit will affect many aspects of doing business from international trade to workforce and skills to regulations and standards. The Brexit Health Check can help companies identify the issues that matter to them and start to take steps to prepare for 31 October and beyond
Corin Crane, chief executive of the BCCC, said: As October 31 approaches and political uncertainty continues, we are working hard to ensure that our members are taking proactive steps to prepare for Brexit.
From our daily conversations with members and through our latest Brexit report, we know that levels of Brexit preparedness vary across the region. We have been urging members to take the business Brexit Health Check to further understand some of the key issues arising from the UK's departure from the EU and to steer internal board and management level conversations.
As our research clearly shows, businesses are genuinely concerned about the impact of Brexit on their people and workforce. That's why we have been discussing the Settlement Scheme at length with our members, to ensure that they are aware of changes to UK immigration policy and their workforce understand what is required to apply for ‘Settled' or ‘pre-Settled Status'.
EU and EEA-born citizens are employed at all levels across a range of sectors and make up around 14 per cent of our region's manufacturing workforce, so ensuring that they understand how Brexit affects them is crucial.
From a trade perspective, through our international trade advisors and export documentation team, we continue to engage with members who contact us to discuss changes to trading arrangements with the EU, ensuring that they receive relevant literature and plenty of useful documents
Complete a Business Brexit Health Check here: www.wmca.org.uk/brexithealthcheck