Throughout the year, as well as coping with a global pandemic, businesses throughout the UK have been filled with dread and worry about the outcome of Brexit and the effect it will have on our nation's trade. As Brexit talks extend and with a no-deal looming over us, many are struggling to find any positives in the situation. But with a new year on the horizon, could 2021 be a boom year for UK small businesses?
With a no-deal now looking likely, the UK will be forced to pay tariffs on imported goods, increasing prices and potentially making UK-based suppliers more competitive. UK small businesses are more than capable of adapting and thriving post-Brexit, and will be able to handle exiting the EU without a deal. With the markets becoming more competitive, this is sure to attract investment into small businesses who are looking to capitalise on the situation, which will furthermore enable future growth.
Private investment is a vital catalyst for wider economic growth - with the UK's high net worth community providing essential early indicators for the direction of wealth at a time where the distribution of capital is key. With a 12% increase in new businesses starting up during 2020 compared to 2019, the new year is set to create some exciting investment opportunities for investors throughout the country and some that are sure to boost the wider British economy.
Despite the current climate, throughout the year UK SMEs have shown resilience and have adapted quickly to the pandemic and the changes it has ushered in. A no-deal Brexit will represent another opportunity to adapt and grow. In addition to this, the number of online job advertisements has reached 1.4million for the first time this year, further highlighting business growth across the country which is sure to extend into the new year.
CEO of IW Capital, Luke Davis:
“Each period of disruption offers opportunity for companies to adapt quickly to the changing times and although there has been a lot of worry and negativity surrounding a no-deal Brexit, it would be unwise to believe that there will not be any benefits to come out of it, especially for businesses and industries here in the UK.
"Working with both entrepreneurs and investors, there is a clear desire from the small business community for growth investment and to take a big step growth-wise in 2021. Small businesses grow by hiring and this sector will be key not only to growing the economy but also combating unemployment. Each problem or crisis will have winners and losers but those that are adaptable and in position to take advantage of the situation could see a big increase for business in 2021.
“Making growth investment more easily available to small businesses that are looking to grow should be a priority. The last time that the Government-backed EIS was extended, it resulted in a significant jump in private investment into small businesses. Replicating this effect with new, or increased, incentives would provide a much needed boost to a section of the economy that is most in need, and so we hope this will be addressed in the near future.”
Founder and Principal Consultant of Cornerstone Tax, David Hannah:
“The UK is a nation of shopkeepers who have shown their resilience throughout a year that has brought financial hardship and have still been able to make it out the other end. There has been a huge amount of discussion around potential recessions but this period is totally different to any previous recession and business owners and consumers alike know this. I would be surprised to see any economic downturn last beyond March.
“This year these SMEs have shown their resourcefulness with many having a big uptick in revenues. From working with a plethora of small businesses across the country, I have been able to talk to the owners and have found that even they feel that they will see an increase in business and expect to see growth going into the new year. There of course will be a transition period, but overall 2021 looks like a year when business owners will look to capitalise on their adaptations without as much disruption.
“We have seen SME growth over a year plagued with a pandemic and financial unrest, so I believe that small businesses will adjust to whatever the trading reality is. The UK just needs to support its small businesses through this period and then we will be sure to see them grow and flourish in the next quarter.”