More than a third of UK companies (35%) with fewer than 250 employees are changing their business strategy as a result of Brexit, according to new research from Albion Capital, the independent investment manager.
The Albion Growth Report 2017, launched today, surveyed more than 1,000 SMEs and found that of those changing strategy because of Brexit, 21% are investing in new offices or existing operations outside of the UK. This compares to only 8% investing more in their UK operations.
More SMEs believe Brexit will hinder companies looking to enter new markets (46%) than help them (30%).
Yet significantly, businesses planning to enter new markets in the next two years are prioritising new domestic markets within the UK (26%) and new markets outside the EU (20%) over expansion in EU markets (14%).
Of the SMEs that believe Brexit will negatively affect businesses entering new markets, 85% cite political uncertainty as a worry, 71% believe the number of export markets will be restricted, while 67% are concerned that their choice of workforce will be reduced.
However, for businesses which see Brexit providing expansion opportunities, 87% believe it will open up new markets to trade with and 46% feel that it will reduce export regulations.
Patrick Reeve, Managing Partner, Albion Capital, says: “SMEs are understandably anxious over the decision to leave the EU, which has cast doubt upon many growth plans, including expansion into new markets, the development of products and services, and staff recruitment.
“But it is encouraging to see that a significant portion of businesses are responding to the opportunities offered by the current landscape, and investing more into new operations. Despite the uncertain political backdrop, SMEs which invest in growth have the potential to create real lasting value.”