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More than one in three SMEs are changing their strategy post-Brexit

More than one in three SMEs are changing their strategy post-Brexit

More than a third of UK companies (35%) with fewer than 250 employees are changing their business strategy as a result of Brexit, according to new research from Albion Capital, the independent investment manager.

The Albion Growth Report 2017, launched today, surveyed more than 1,000 SMEs and found that of those changing strategy because of Brexit, over a fifth (21%) are investing in new offices or existing operations outside of the UK. This compares to less than one in ten (8%) investing more in their UK operations.

More SMEs believe Brexit will hinder companies looking to enter new markets (46%) than help them (30%). Yet significantly, businesses planning to enter new markets in the next two years are prioritising new domestic markets within the UK (26%) and new markets outside the EU (20%) over expansion in EU markets (14%).

Of the SMEs that believe Brexit will negatively affect businesses entering new markets, 85% cite political uncertainty as a worry, 71% believe the number of export markets will be restricted, while 67% are concerned that their choice of workforce will be reduced. However, for businesses which see Brexit providing expansion opportunities, 87% believe it will open up new markets to trade with and 46% feel that it will reduce export regulations.

For businesses changing their strategy or plans as a result of Brexit:

• They are most likely to be abandoning product and service developments (21%), reducing operations and supply costs (17%), or expanding their online presence (17%)
• Younger business leaders are more likely to change strategy than older entrepreneurs (42% of under 35s and 48% of 35–44s, as against 33% of 45-54s and 29% of over 55s)
• Manufacturing (46%) businesses are most likely to change their strategy
• Business in London (45%) are most likely to change their strategy, followed by the North-West of England (40%)

Patrick Reeve, Managing Partner, Albion Capital, says: “This year’s report reveals an interesting disparity between businesses which are optimistic or pessimistic on the opportunities available to them in the post-Brexit environment.

“SMEs are understandably anxious over the decision to leave the EU, which has cast doubt upon many growth plans, including expansion into new markets, the development of products and services, and staff recruitment. But it is encouraging to see that a significant portion of businesses are responding to the opportunities offered by the current landscape, and investing more into new operations. Despite the uncertain political backdrop, SMEs which invest in growth have the potential to create real lasting value.”

-Ends-

For more information, please contact:

Jonathan Atkins/ Anthony Cornwell/ Danae Quek
Four Broadgate
Tel: 020 3761 4431/ 07910 519 602/ 07900 491 881
Email: AlbionPR@fourbroadgate.com

About the Albion Growth Report

The Albion Growth Report, now in its fifth year, has become a trusted barometer of small business sentiment across the UK. This year’s research was conducted by YouGov in July 2017 and surveyed 1,095 senior decision makers from SMEs (less than 250 employees) across a variety of sectors and regions. The full report is available on request.

About Albion Capital
Albion Capital is a leading independent investment manager with a long-term record of partnering ambitious business. The Albion Group has funds of just under £1 billion under investment management or administration.

The Albion Group invests anywhere between £250,000 and £12 million into companies to create long-term value for charities, private clients and other retail investors.

Albion Capital Group LLP is authorised and regulated by the Financial Conduct Authority.

 

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