Written by Kirsty McGregor is Founder of The Corporate Finance Network and The Association of Crowdfunding Experts
NORMALLY, I choose to keep my political persuasion to myself, but with this upcoming EU referendum I am actively contributing to the debate, in my community and on social media. I feel it’s my duty to make sure a business-perspective is heard and understood, as we have that overview that most individuals as employees don’t.
In 20 years’ time it won’t really matter how we voted. Whether we are still in the EU or have left to plough our own furrow, I’m sure the economy of the United Kingdom will have recovered and grown. I have faith in our entrepreneurial nation to rebuild itself without the support of the European Union. And I don’t believe the UK of 2036 will look much different whether we vote in June to remain or leave.
My overriding concern is far more short-term. If we vote to leave, the next five years will be tumultuous for business and the economy.
We are slowly recovering from a long drawn-out recession, with innovation and growth picking up speed, albeit shakily. But if we vote to leave, the uncertainty will undoubtedly affect the stock market and the value of sterling, and the nerves of the huge numbers of owner-managed businesses in this country will be rattled whilst everyone holds their breath to see what happens next. All the legal, regulatory and economic ties with Brussels can’t be unravelled within two years. And I fear that it will take much longer, and cost far more, than the ‘Leave’ camp assure us is the case.
While smaller businesses are known to be agile, the older generations of business owners are getting tired. There is an ever increasing demographic of owners who haven’t planned for their exit, and are likely to run lifestyle companies that aren’t attractive to trade buyers. SMEs in this country provide almost half of the jobs in the private sector. I have said for years that we are reaching a precipice where thousands of small businesses will have to wind up because their owners need to exit, but there is no buyer waiting in the wings. And there is a real likelihood if older business owners have to face yet another round of tough times, customers not growing and finance providers not being supportive of expansion, many will choose to close the doors.
The younger generation of business owners will undoubtedly still prosper. Millennials are born to be disruptive and will find ways to take advantage of the situation. New products will be created, markets conquered and horizons expanded. Just as in the most recent recession where a collection of young entrepreneurs saw the opportunity of crowdfunding, and propelled a new form of finance into the business world, because the traditional providers were losing their appetite and the trust of customers.
As I regularly speak to accountants about the growth of crowdfunding and the ‘new way’ of advice that the next generation of entrepreneurs requires, I know that the vast majority of firms do not have a good mix of ages in their client base. Traditional firms aren’t attracting the younger business owner. So if your clients are generally much older, then you should worry.
If you want to protect your future fee income, the value of your firm, and the career opportunities you are providing for your team, you need to stand up and make your voice count in your communities. If you believe the short term will be too unsettling at this stage of our economic recovery, and will cause far more damage than the eventual longer-term gains we may make, then share that knowledge. Don’t be afraid to make your voice heard. If we sit back and don’t add our expertise, what will the younger generations think of our profession in years to come?
Kirsty McGregor is Founder of The Corporate Finance Network and The Association of Crowdfunding Experts
Legislation on the NICs changes to be brought forward in the autumn following publication of 'the full effects of the changes to Class 2 and Class 4' in the summer
The SME community voices concern about the chancellor's measures in the Spring Budget
Following chancellor Philip Hammond’s Spring Budget speech, we explore the key takeaways for businesses and individuals
One of the bigger announcements of the final Spring Budget is the raising of Class 4 NICs for the self-employed