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Business News, Featured, General Interest

Will A Brexit Affect British SMEs?

Brexit for SMEs

Prime Minister David Cameron recently returned from renegotiation deals for Britain’s membership of the European Union. It was a policy set out in his Conservative manifesto, and something people have been waiting a long time for; as can be seen with the rise of UKIP in recent years and their success (in terms of number of votes) at the recent election. With the referendum date set for 23rd June 2016, campaigning has begun for both the “in” and “out” camps. Below we look at the impact a Brexit could have on British SMEs, who provide a combined annual turnover of £1.8 trillion to the UK.

The UK are champions of the single market, but a Brexit would limit their advocacy for further liberalisation. Many EU regulations allow for the platform that a single market requires, and by leaving Britain would lose the influence to shape EU policy and regulation in this market. Some argue that EU processes can be opaque and hard to influence, particularly when it comes to trying to shape policy for SMEs, and so losing what they see as limited influence isn’t such a bad thing.

However, the UK do still have one of the heaviest influences within the EU as they can veto in a number of policy areas. Around 74% of firms believe that the UK can continue to be influential over EU policy, and also that a Brexit will have a “negative” or “very negative” impact on SMEs (see more details here).

Some of these firms, such as EasyJet and Shell, have a signed a letter in support of the UK remaining as a member of the EU. They write that the Brexit would “deter investment and threaten jobs”. However, the opinion from SME executives remains less clear. The Forum of Private Business has refused to announce which side they support and simply urged for a reasoned and informed debate. Mike Cherry, the Policy Director at the Federation of Small Businesses, shared this approach when he said “Our research shows small business owners want both official campaigns to focus on the practical impact that remaining within or leaving the EU would have on their firms.”

As for the small business owners themselves, The Europe Business Review recently stated that 82% of SMEs regard the EU as important to their future growth. Markets in China and Brazil appear to be slowing down, seemingly making our dependency on the EU even greater. A Brexit could result in a recession, which SMEs are much more vulnerable to than larger businesses. It is likely that trade negotiations would be quickly renegotiated to stem any fallout from a Brexit, but it can’t be guaranteed how quickly this will happen and how SMEs will survive in the meantime.

As a member of the EU we are also part of the free movement policy, which allows for a large pool of highly-educated and highly-skilled potential employees to pass freely into Britain, perfect for SMEs. A Brexit could change this, halting free movement, increasing the battle between businesses for employees and an increase in wages as the cheaper influx of labour from outside of Britain is cut down. While this is good news for employees on potentially all spectrums on the wage scale, SMEs typically rely on cheaper labour.

Britain may however get the opportunity to better regulate social and employment policy, as well as trade and immigration policy if they leave the EU. Although only 12% of SMEs with 0-49 employees are actively engaged in international trade, all are affected by EU legislation, for better or for worse. Allowing British leaders to decide policy with British SMEs in mind could have many positives.

In the event of a Brexit, trade would continue with the EU and it is likely that an EU-UK Free Trade Agreement (FTA) would be reached due to the benefits of this for all EU member states. The UK would be free to negotiate this FTA on their own terms. However, it is worth remembering that the EU is the main trading partner for the UK, where we trade in excess of £400bn a year, and so we need them just as much as they need us. It will take awhile to renegotiate these deals and overseas clients might be hesitant to trade with British SMEs while uncertainty is still rife, so relying on more robust deals after a Brexit is not a secure or safe option.

We also assemble in the UK, but rarely manufacture, and so a Brexit could affect imports and exports negatively. Daniel Todaro, the Managing Director of Gekko, has said that “Ultimately, the single EU market has, and continues to be, absolutely crucial to emerging SMEs looking to expand operations overseas; and Europe is the first port of call.”

SMEs currently get support from the EU, such as with grants and loans, and this would most likely cease if a Brexit occurred. However, the UK does operate its own support organisations for SMEs such as Innovate UK, and upon leaving the EU the UK would save a sizeable amount in EU contributions, which a portion of can then be used to pump back into the funding of SMEs.

It is likely that in the short term a Brexit would cause disruption for SMEs. The uncertainty leading up to the referendum will leave the market shaky and may even devalue the Sterling, and setting up any treaties or agreements post-Brexit will take time, a commodity that SMEs don’t always have. However, in the longer term the effects would potentially become more beneficial to Britain, as British politicians gain greater sovereignty over British policy. They should still keep a good relationship with the EU, especially as we are their third highest contributor with approximately €4.7bn net contribution per annum, and so it is unlikely that a Brexit would be disastrous for Britain in the long term.

March 7, 2016by Anna Lemos
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Company Addresses, Featured, Start-Ups

Working in non traditional office 101 – Registered addresses and Start Up Hubs

Working in non traditional office 101 – Registered addresses and Start Up Hubs

If you are a small business owner just getting started with an innovative new start up, you are undoubtedly excited about your (hopefully) impending success. You have the skills, you have the know how and you have the unique ideas that will propel your new company from obscurity to achievement – but do you have a registered office address and a place to work?

What is a registered office address?

In order to conduct business, all all limited companies and Limited Liability Partnerships (LLPs) (no matter the size) in the United Kingdom are legally required to have a registered office address. This is required before you start charging clients and producing invoices, and so many people ensure that this is taken care of early on in their planning processes. After all, being able to charge clients is pretty pivotal when it comes to business!

What kinds of addresses can you use?

Of course, for some types of businesses, a physical address will be a given. For instance, if you are planning to open a new craft micro brewery that focuses on British IPAs, you will have an address at which you operate, and you can choose to use this as your registered office address. (Of course, you can also choose to designate a different location as a registered office address.)

With that said, you might be operating a start up, and you might not need a set, determined physical space in order to work your magic. For instance, freelance writers, graphic designers and even event planners can do their daily tasks at a variety of different locales, including their home, a coffee shop and even down at the local pub.

In this is the case for you, what should you use for your registered business address?

  • Your home –In some cases, is completely legal and acceptable for you to use your home address for your business. However, this information is completely publically accessible, and that means that your clients (not to mention anyone who cares to search you) will potentially know exactly where you live. If this does not bother you, feel free to go ahead and submit your residence as your registered office. If the idea of the general public knowing where you live gives you a bad feeling (or you feel it could leave you open for danger), it might be a better idea to utilise another option. (*Note – Some landlords will not allow you to use your home address for business purposes – ensure that you check with them in advance.)
  • A traditional office space – A traditional office is a great idea if you have a staff of more than one or two people, if you need a storefront, or if you plan on expanding very rapidly. With that said, traditional office spaces do not often come cheap, and many start ups cannot afford this during their initial periods of operation.
  • Registered Office & Mail forwarding services – If you plan to work at a start up hub, you may want to use a Registered office address, a service that is offered by many companies across the country. For a fee, they will allow you to use their address as your registered address, allowing you to stay on the right side of the law and keep your privacy.

What are start up hubs?

This is the ideal solution for many entrepreneurs who are just getting started. Start up hubs (also known as co-working spaces) are collectively occupied office and relaxation spaces; you rent a desk or workspace, and in some cases you can even utilise this as your registered office address.

In addition to a desk and a Wifi connection, these hubs are often also innovation labs, business incubators and social enterprise community centres. They are usually well located, affordable, attractive and well stocked with other brilliant entrepreneurs, giving you ample opportunities for networking. Work, collaborate, make use of the amenities and give your business the kick start it needs – these are cool spaces that have launched many a start up.

Start Up Hub Office Spaces Across the UK

Here are some of the finest start up hubs across the country. Remember, many start up hubs offer a signing bonus or trial offer that can glean you free office space for a day, a week or even a month.

  • The Trampery – With convenient locations spread across East London, the Trampery offers its inhabitants modern and efficient office space in edgy, up and coming neighbourhoods such as Old Street, Bevenden Street, Tower Bridge and Hackney Wick. Their work spaces are tailored to their architectural surrounds; Edwardian warehouses, brand new glass towers, eco-builds and Victorian halls.
  • OpenSpace – Manchester is home to this members collective of writers, artists, designers and small business owners, and OpenSpace not only gives them a place to work, it also gives them a sense of community. With desks starting at 147 pounds per month (for members), this is an affordable, friendly and functional space to work.
  • Impact Hub – If you love to travel and want to wander the world while you produce your products or services, Impact Hub might be the perfect co-working space for you. With offices located all over the world, you could always use the closest address for your registered office address while taking advantage of an unlimited membership that will grant you access to spaces across the globe.
  • Baltic Creative – Need a great working space in Liverpool? Baltic Creative is for you. Located in the revitalised Liverpool Docks, this hub is comprised of regenerated warehouse spaces that will lend your business an on-trend feel and help you connect with other entrepreneurs in the area.
  • Funkyspaces – Funkyspaces provides bare bones desk space (think less community building and relaxation spaces and more just a place to get to work and connect to wifi) to Bristol start ups and freelancers. With locations across the city (and rock bottom prices starting at 53 pounds per month), this is a great solution for those who want to get down to work and don’t really fancy socialising.
  • The Hot Desk – Located in Glasgow, The Hot Desk provides solutions for many different types of businesses; students, freelancers, designers and start up entrepreneurs will all find pricing structures that work for them (5 days a month starts at just 60 pounds). Featuring super fast internet connections, a bike shed and a communal kitchen, this is a great option for any business in need of a desk.
March 3, 2016by Anna Lemos
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