2016 was a year when the broader events going on in politics and economics strongly impacted SMEs in the UK, and this is a trend that is likely to continue in 2017. Here are some of the things that business financial experts like Touch Finance believe may have an impact on your business from a financial standpoint this year:
Businesses who trade with other countries and who have to perform currency conversions will have already felt the effects of the Brexit referendum, with the pound losing value and then beginning to strengthen again.
Now that it has been stated that the UK will be leaving the single market when Brexit comes into effect, new terms will come into play when you sell to people in other countries, and what these will be will depend on the negotiations the UK make with the World Trade Organisation. Brexit will not actually happen in 2017, however these negotiations are likely to begin as soon as Article 50 is invoked, and the outcomes will need to be considered in your planning.
If you have a global strategy, or you import things, customs may become a more important issue, and you may also have to consider the status of your workforce if you employ people from other EU member states.
Most trade performed by SMEs with countries outside of the UK is with EU member states, however Britain isn’t the only entity that might leave the EU. France, the Netherlands and Germany all have important elections this year, and the results of the referendum in Italy last year have also called into question whether Italians want to remain in the EU. If more countries decide to begin the process of leaving the union in 2017, this may affect your own trade relationships, and you may also find that Eurozone countries may switch to entirely new currencies (or permutations of their pre-euro currencies) as they leave, causing you to need to deal with transactions in currencies you won’t have had to consider before. Again, it is unlikely anyone will actually complete leaving the EU in 2017, but the outcomes of elections may well call some of these things into question for the future, and have an effect on the value of the pound and euro.
Politics isn’t the only thing that could affect your SME this year financially, and even if you are not involved in any trade outside of the UK, you may still be impacted by domestic financial changes. Within the next two years, all businesses that employ anyone over 22 on a salary of £10k or more need to offer a workplace pension scheme, and if you don’t have this in place yet, you’ll need to take action sooner rather than later. Polls showed that as many as half of businesses who haven’t yet got this organised don’t know what to do about it, so now would be a good time to do your research and start implementing a compliant pension scheme, to avoid panic or worse – fines – later on.
These are three of the main things to watch out for when it comes to your business and the economy in 2017.