In my last blog post, I discussed the possibilities facing small businesses in London if the EU referendum resulted in Britain leaving the EU. Unfortunately, that possibility became reality on the morning of 24th June and the resulting turmoil has left the business world in a state of disquiet, anxiety and for some, utter shock.
What’s The Damage So Far?
As soon as the news was reported that a 52% majority had voted to leave the EU, the reality and effects of that decision became noticeable. Within 12 hours:
- The pound fell in value (to the lowest level against the US dollar in 32 years)
- The FTSE 250 fell by 14% from the previous day’s closing figures
- The 15 richest people in the UK lost a total of £4 billion collectively as markets plunged
- Many businesses, such as Vodafone, have warned that they plan to move their business out of the UK if trade agreements fail
- 25% of company directors plan to initiate hiring freezes during the uncertainty ahead
I know there’s an overwhelming demand for people to ‘stop going on about it’, but I really don’t think most people understand the damage that will be caused if we cut our ties with Europe. If we stop talking about it, we will never get anywhere. There’s no plan without communication.
The only certain thing about uncertainty is that it is uncertain. The uncertainty alone freezes decision making in business, and this causes the economy to stop growing and even shrink, leading to what media outlets are terming ‘Texit’ – the presumption that tech companies will leave Britain, as Britain leaves the EU.
This doesn’t just cause issues for ‘the rich’ and ‘business leaders’, it directly impacts every single person who contributes to society. Right at this moment it makes more sense to setup a business outside of the UK than it does inside it. People seem to have forgotten that our economy is primarily built on service based companies, the contribution of which has steadily grown from 46% in 1948 to 78% in 2012.
These companies can be based anywhere in the world, but choose to be here because of the EU, our relationship with EU countries, and the certainty/stability of the pound. I would love someone to explain to me how this Brexit thing helps us in any way that isn’t someway driven by a generic statement like ‘wanting change’. Wanting change to our political system is a good thing and in my opinion is needed. However, people have been hoodwinked into thinking that leaving the EU means that we will somehow see new economic opportunity and growth.
Already, just over a week later there is buyer’s remorse from many in the Leave camp as well as those who voted to remain, and there is confusion over what to do next.
So what now?
We need to snap out of the haze. Like Baroness Lane Fox I believe we need to accept what has happened and begin to take a progressive view on how to move forwards. In the words of her letter to the Evening Standard “The worst thing to do now would be dwell on the result and not look to the future”. I 100% agree.
Now is the time to take a progressive view, remain dynamic and revert to Entrepreneur 101: remain agile and look for opportunities. It’s easy to look at the current situation and become so overwhelmed with uncertainty and fear that you stop trying altogether. I know that things might seem a bit hopeless right now, but I invite you to look at this from a different perspective: now is the time to make your mark! Take the opportunity to overcome adversity, stare odds which are stacked against you square in the eyes, and say “My business and entrepreneurial spirit will overcome this, this is not going to hold us back.”
There will be challenging times, but also opportunities. As global tech investment firm Atomico stated, some of the largest companies around today were born in tough economic times; “Entrepreneurs are resilient. We’ve seen this over and over again. Microsoft and FedEx started out in the 1973–1975 oil crisis and US recession. Skype was founded in 2002, during what was still the dotcom nuclear winter. Airbnb, Spotify and Uber were born during the 2008–2009 financial crisis. This, if it turns out to be a crisis, will be no different.”
The future is ours, and it’s up to us to make it work in our favour.