In a survey of 611 UK mid-sized businesses, Grant Thornton found that ‘Brand Britain’ is also considered to be an advantage to UK firms looking to venture into new international markets - 70% of those surveyed believe it is helpful when trading internationally, only 7% disagreed.
While Brexit posed a level of uncertainty to many businesses at the start of the year, most (62%) of the businesses surveyed believed that they were well prepared for the impacts felt from Brexit so far.
But the transition has not come without its challenges. The research identifies the four biggest impacts felt from Brexit in the mid-market over the past six months as:
- Trade compliance issues (44%)
- Setting up new overseas operations (40%)
- VAT compliance issues (35%)
- Immigration and people mobility challenges (34%)
Andrew Howie, Head of International, Grant Thornton UK LLP, commented:
“The last year has presented huge uncertainty for businesses of all sizes, with Brexit and the pandemic creating an ever-changing operating environment which has been extremely difficult to navigate. But mid-sized businesses have proven their resilience and it is clear from our research that, despite the challenges posed, many are currently feeling more positive about the impacts of Brexit than first feared.
“But there are still further changes and milestones to come from Brexit. Careful management will continue to be needed by businesses throughout the coming months to avoid further disruption to their operations; particularly once the level of international travel increases and the current grace periods come to an end."
While the research finds that Brexit has strengthened ‘Brand Britain’ for the mid-market, the uncertainty it posed has changed the market’s approach to international growth. Just under two thirds (60%) of respondents said that Brexit has prompted their business to focus more on the domestic rather than international markets.
Despite this shift, it is clear that international expansion is still on the cards for many, perhaps now that the dust has settled from the immediate Brexit transition.
Almost half (40%) expect to invest more in their international growth plans over the next six months – the third highest investment priority identified in the research, after technology (48%) and skills development (44%).
Andrew Howie added:
“While Brexit may have focused more attention on the domestic market temporarily, it could open up doors to new international opportunities. With discussions ongoing around new trade deals with countries across the globe, and the recent deal confirmed with Australia, the ease to operate and grow internationally could encourage many businesses to explore new markets. For example, two thirds of our survey respondents felt that a free trade agreement with India would be more likely to encourage their business to explore opportunities in this market.
“With new trade agreements underway and mid-market businesses planning to invest more in their international growth plans, we are entering an exciting chapter of a new global Britain with businesses able to explore opportunities internationally that they may not have been able to consider before.”
Notes
*Censuswide (on behalf of Grant Thornton UK LLP) surveyed 611 senior decision makers in UK mid-market businesses, defined as £50million-£500million turnover, between 28 May – 8 June 2021.
