By Ben Moore, General Manager, QuoteSearcher
In the run up to the EU Referendum on June 23rd we have heard numerous large businesses and corporations speak out about the advantages or disadvantages of leaving the EU. However, throughout this time I have noticed that the voices of smaller companies, particularly SMEs, have yet to be heard.
By their very nature, SMEs are generally more vulnerable to economic and political changes than their enterprise counterparts. This is mainly due to monetary and resource reasons: the more money and resources a company has the easier it is for them to weather storms and restructure to suit current political and economic trends.
This is why over the past few months QuoteSearcher has decided to investigate SMEs and their views on the EU, both in terms of political leanings and business acumen. Being an SME ourselves, we understand the challenges presented to these types of companies, particularly in times of political turmoil. Now, we want to understand how other SMEs feel about what could potentially be an extremely trying time for them in the near future.
Two YouGov surveys were issued to over 600 SME decision makers – the first on the EU Referendum and the second on SMEs’ opinions on exporting both within the EU and worldwide. At first glance some of the results were not overly surprising: SME decision makers who voted Conservative were more likely to have a negative view of the EU than their Labour counterparts, however after further analysis we found some intriguing trends.
WANT TO BUILD A FINANCIAL EMPIRE?
Subscribe to the Global Banking & Finance Review Newsletter for FREE Get Access to Exclusive Reports to Save Time & Money
By using this form you agree with the storage and handling of your data by this website. We Will Not Spam, Rent, or Sell Your Information.
The most poignant finding we have gleaned from our studies is that SME decision makers are in danger of putting their political beliefs before what is beneficial for their businesses. For example, in the first survey, when asked whether an EU-Exit would affect their hiring abilities, 66% said that they would not be affected as they already don’t hire from outside of the UK. Furthermore, 46% of respondents said that a British exit from the EU would have no effect on their relationships with their customers or clients.
Conversely, in the second study SME decision makers were much more positive about Europe, especially when it came to how it could benefit their businesses. For example, 31% stated that the EU offers “a lot” of trade opportunity and 64% claimed that Europe is the most profitable potential partner to export goods to.
Professor Simon Down, Deputy Dean for Research and Enterprise at The Lord Ashcroft Business School, Anglia Ruskin University, kindly analysed our research and provided expert commentary on the results. Speaking on our most recent survey, Professor Down said: “Having most respondents (64%) saying that Europe is/would be the most profitable region for UK SMEs to export their products/ services to is a really strong response which underlines the points set out by the Confederation of British Industry (CBI) and similar pro-EU business lobbying organisations.
“This is also a strong endorsement for the EU despite other responses that are somewhat more ambiguous or negative. In the previous study we saw that opinions of SME decision makers on hiring staff outside the UK were generally more negative, however when it comes to exporting in the EU and even worldwide they are more positive.
“This study shows us the head, before we saw the heart. The reality is most companies will go where the money is – however this doesn’t mean they don’t have contradictory personal political views.”
You would think that the government would therefore do more to target SMEs in their pro-EU campaigns instead of relying on big businesses to do the talking for them. Even their recent Exporting is Great campaign has failed to have the desired effect of encouraging UK businesses to think about selling their products or services abroad, with 69% of our respondents stating that they had never heard of the campaign before.
“If the government’s Exporting is Great campaign was more successful, there may well be a greater willingness from SME decision makers to think about staying within the EU,” said Professor Down. “The previous study showed us that politically and ideologically, most SME decision makers are more Conservative, but when it comes to making money for their businesses they may well want to stay in the EU.
“If the government really deepens their campaign in terms of the benefits of staying in the EU and potentially even subsidising the cost of businesses exporting to not just Europe but also the rest of the world, one might think it could change.”
When SME decision makers head to the polls will they vote with their personal views or their businesses in mind? It’s difficult to judge, but whatever the outcome I believe that SMEs will have to take on more of the risk and burden of an EU exit than larger companies, a situation which I’m sure will lead to heated debates even after the referendum is complete.