Brexit Implications for SMEs

The impact of Brexit on American small businesses

David Nilssen, CEO and Co-Founder of Guidant Financial.

Who are the biggest winners and losers with Brexit? That’s the million-dollar question that nobody seems to be able to answer lately. Experts say only time will tell how the global economic situation will net out. Meanwhile, I checked in with Guidant Financial (http://www.guidantfinancial.com) CEO and co-founder David Nilssen to find out his perspective and what’s good and not so good regarding the Brexit situation.

Here’s what I unearthed, but first, a quick cheat sheet on Brexit.

If you are unfamiliar with Brexit, it means the British exit from the European Union (EU). In "Stunned: UK Votes to Remove Itself From EU," I cover why the vote was held, what is the European Union, why the vote was needed and who would have benefitted from staying in the UK. 

Now that you’re familiar with Brexit, here’s what Nilssen had to say regarding the impact to American small businesses

Laurel Delaney: What are some implications that will come from Brexit that most voters didn’t realize or understand? 

David Nilssen: It appears that many British voters were confused as to what the decision really means for Britain. The implications were much broader than just their own country, and the decision lacks a global perspective. The purpose of the EU was to increase trade and stabilize the region. Conflicts have certainly decreased from having an economic dependency.

And I would argue that their economy has been stronger because of the stabilization of Europe, increased trade and friendly immigration laws. But we really won’t know the implications while the exit is planned—and maybe for some time after.   
 
LD: What does the decision mean for Britain and all business owners who operate there?

DN: Overall it’s hard to see the major win for small businesses. They depend on consumer confidence being high so spending follows. Many experts predict that the pound could sink up to 30 percent, which means it’s more expensive to import goods. It’s also expected that multinational businesses that reside there are likely to relocate to other EU countries—and that’s not good. With the changes, it’s likely that wages will increase (because immigration will be tighter) and property prices are expected to fall.  
 
LD: Were you for or against Brexit? Why? 

DN: I’m against Brexit because it lacks a global perspective. I think it’s yet to be determined whether it’s a positive or negative for our customers—Main Street American small businesses. We may have two years of negotiations ahead of us. Uncertainty spooks the capital markets and increased volatility creates fear and incents consumers to save, rather than spend into our economy, and this hurts business.  
 
LD: Is there any benefit or silver lining to Brexit for any business owner? 

DN: The silver lining is that the Fed will likely have to keep interest rates lower, and that’s good for small businesses trying to access capital. And it’s great for small businesses looking to borrow or expand.

But we need a healthy, confident consumer for that to be a win-win. A healthy economy will always trump slightly lower interest rates.
 
LD: Do you anticipate any changes to the regulatory environment, such as data protection?

DN: I do expect information exchange to be less fluid between EU countries because of this change. And data protection will continue to be a major concern regardless of the Brexit decision. We live in a world where we have to be more careful about how data is received, exchanged and protected.
 
LD: Anything we’ve missed? Any leading edge trend we are missing here?

DN: This move is likely to strengthen our dollar long term. This could be helpful to the travel industry and support trade.

Note: I covered BREXIT in two other articles. Be sure to read:

  1. Stunned: UK Votes to Remove Itself From EU
  1. What Happens to SME Trade if Britain Leaves the European Union (EU)?