What does the prospect of Brexit mean for small and start-up companies?


What does the prospect of Brexit mean for small and start-up companies?

What does the prospect of Brexit mean for small and start-up companies?

The UK has voted to leave the European Union, and with the significant effects its likely to have on the economy and politics, you might also be worried about the effect on your start up. Here are the things you may need to know as a business owner;

As we have seen over the course of many many months Brexit is not going to be an overnight process – There’s been a lot of volatility in the market and politically, but many things related to the EU are remaining the same… for now.

  • What’s changed already?
  • What about EU laws – do we still obey them?
  • What does it mean for investment in my business?
  • Is my EU trademark still valid?
  • What about duties, and other fees related to selling to countries in the EU?
  • What about my visa/right to be in the UK, or that of my employees?
  • Overall economic impact
  • Employment
  • Legal issues

The pound has sharply dropped and continued to fluctuate based on political events which could mean uncertainty with consumers and an impact on your profits. If you sell to EU countries (and outside the EU) this could be more pronounced, due to the current weakness of sterling.

Yes, The UK is still bound by any EU legislation that affects us until we formally leave the EU, whenever or even if that may be.

If you’re on enterprise investment schemes such as the SEIS and EIS schemes, don’t worry. They’re still in place and likely to remain safe, as they’re schemes supported by the UK government… More than ever, investment into UK start-ups needs to be encouraged.

Don’t worry – your trademark is still valid and enforceable. It’s really unlikely that this will be affected even post-Brexit.

Right now, things continue as normal. However post-Brexit it will all depend on the terms negotiated by the government.

Everything should remain the same for now, unless changes are announced by the government, and for EU nationals the free movement of people will still apply until Brexit

Unfortunately, the economy in general has failed to grow as much as analysts forecast prior to the referendum. After the Brexit vote, the pound has fallen to its lowest level in the last 30 years — 5% over the past couple of months. The trade deficit has unexpectedly widened, with Britain’s trade balance reaching £12.3bn, compared to analysts’ prediction of £11.3bn ($14.4bn). Targeting EU countries with your products or services could drastically affect your profit due to the current weakness/7 of sterling.

Even though Britain would be free from the mandatory net contribution to the EU of £9bn, analysts say the cost of leaving the EU will eventually exceed these financial benefits for the UK. In a worst-case scenario, the UK’s exit of the EU could mean that British start-ups or small businesses will no longer be able to enter European markets on a cross-border or branch basis.

Level of investment

British business has already felt the drop in the level of financing, as foreign investment has fallen 92% since the referendum in June 2016. And the main reason why businesses hesitate to contribute any money in the UK right now: Brexit.

Previously, the UK had no trouble attracting international financing, having relatively low-cost tariffs and government initiatives through subsidies and grants. Now, if the UK loses access to the EU single market, the damage to the level of foreign direct investment — or FDI for short — could be significant.

As reported by governmental sources, FDI may well reduce by no less than 22%, after Britain divorces the EU. So, in the next couple of years, more than ever, investments in UK start-ups needs to be encouraged

British businesses and start-ups in particular, are about to face a severe workforce crisis for the first time in almost 50 years. The freedom of movement always was one the core backbones of the EU, but after Brexit, it will probably sink into oblivion for UK citizens. Following the referendum in 2016, Indeed noticed that the number of qualified personnel looking for a job outside Britain significantly increased in just a few days after the official announcement. Unfortunately, this trend has not changed over the years.

The legal and regulatory positions in your contracts with employees, clients and outside contractors must be carefully examined under the new jurisdiction. These frameworks will surely evolve to become more complex and will require some time to get used to.

So, is Brexit a good thing?


It’s hard to answer this question unequivocally. On the one hand, constantly evolving EU regulations completely frazzled the UK, as they are costing the country tens of millions of pounds every couple of weeks. From a financial standpoint, Britain will no longer have to pay the EU membership cost to the common budget. Considering the UK contributed somewhat about £13.0bn in 2017, it could use this money for the country’s needs to ensure its far-reaching success and growth. It may also mean that the government will be more welcoming and forthcoming toward emerging start-ups.

Also, in the business context, Britain will soon be free to set their own custom terms when trading and negotiating with other nations. Countries such as Australia and China, for instance, are now getting ready to make free trade deals with the UK in 2021 (following the conclusion of Brexit). In that case, you may consider new market opportunities for your business and already start looking for long-term clients from the abovementioned countries.


Brexit will not be easy for the UK. If sterling continues to weaken and the increase in the economy continues to fail its prognosis, it may significantly backfire on small businesses and start-ups, especially if they are only in the angel or seed stages.

In any case, to tune your start-up’s attitude toward future success in the changing market, your current structure and operations need to be examined and reconsidered, if necessary, to fit the new paradigm.

What have you found difficult in the last few years and is this because of Brexit? Do you need help?We’d be more than happy to help.Contact us for more information.