Brexit: sane insights and practical advice for small creative businesses
Early in the morning on 24th June 2016, I walked into my living room to find my partner staring at his laptop in total disbelief…he then almost inaudibly uttered ‘Brexit won’. The shock immediately sent us both outside, with Eddie my dog, for a fast paced beach walk in the sunshine. We felt like someone had died and we needed to absorb the news amidst natural surroundings in order to draw breath. We both run small creative businesses, work with and are friends with numerous other creative professionals.
I launched MSPA at the height of the last recession – practically in response to it. I understand how to shapeshift in leaner times but I have no desire to rush back to those early days. As a firm Remain supporter, my reaction was fear, frustration, and deep sadness.
Since that day, I’ve tried to be careful about what I’m ‘consuming’ media-wise to remain sane, positive and productive! Not getting pulled into too many pulse-raising headlines or disappearing too far into the Twitter wasps-nest of the moment! I have however been reading up on some insightful and practical articles, from respected creative industry experts and commentators, to help me better understand what’s happened and to share with our audience.
So what does ‘change’ on this scale really look like for small creative businesses? Are there any benefits? And how do we keep moving forward through this current uncertainty and an avalanche of opinion?
This is what I found to share with you.
After 43 years of membership, the UK has voted to leave the EU, with a majority of 52% of the electorate choosing Leave and only 48% backing Remain – a landmark event in the nation’s history.
What does all of this spell for the creative industries? Designers and creative leaders have voiced their concerns about how Brexit could negatively impact design businesses – their main reasons being less access to international talent and to exports, loss of collaboration with consultancies abroad, and potential damage to intellectual property and design registration laws.
Others have noted that there could be a silver lining, with a possible “reduction in red tape” in regulation for businesses, and also more flexibility over grants and loans due to less restriction on state aid.
The Creative Industries Federation has responded to the Leave vote with determination and optimism to engage the UK’s cultural community and safeguard its future. The main issues the organisation will be focusing on are access to funding and international creative talent, alongside creative education.
Chief executive John Kampfner says: “Within the UK, we will play our part in helping to bridge divides within and between the nations and regions of the country. As the UK creates a new identity and a new position on the world stage, our arts and creative industries – the fastest growing sector in the economy – will play an important role.” From Brexit: what does leaving the EU mean for designers?
“As unsettling as a time like this can be, I have good news for anyone who owns a micro or small business: you can swiftly implement change and turn on a dime. I personally learned this in the depths of the 2009 recession, when gallery sales dropped off a cliff. Yet by cutting costs in every way possible and introducing guaranteed and measurable income streams, the business managed to navigate tumultuous times thanks to what my business adviser described as ‘tenacity’ and ‘willingness to change’. Regardless of what the future brings, you are in a strong position to navigate storms – should they come.”
“While you could spend hours and days digesting unfolding news, ask yourself how such a time suck benefits you and your business. With time a precious asset, it’s surely better spent pursuing the life of your choosing.”
In another blog post, Susan goes on to say…
“Uncertain times call for differing strategies. For readers either based in the UK or with buyers based there, it could be worth your while to mention the elephant in the room. Rather than make follow-up calls, emails and messages without any mention of Brexit, consider referencing it before transitioning into the sales offer. It also serves as an ice-breaker.”
“Better yet, you can turn an environment of uncertainty – known for having larger economic implications** – into selling opportunities. Mention how art is providing what the doctor ordered, by uplifting one’s spirit and brightening the environment (bearing in mind the work of art, of course). And if you’re selling art from the UK to collectors based elsewhere, it can be an opportunity for them to save $$$, thanks to the shockingly low value of the pound sterling***.”
“One thing is without a doubt: in times of uncertainty, whenever and wherever they might be, it’s important that people keep spending. Freezing purchases owing to “things sort themselves out in the markets” often only leads to worse economic times, which is what happened back in 2008/9. Rather than stand back and let that happen, continue to pursue sales, agree to follow-up with prospective buyers who get cold feet, develop new income streams if necessary, and keep spending (within reason and your budget), making an effort to support other local enterprises.”
Cut back on everyday spending – “Small business owners don’t currently take enough steps to reduce bills by switching energy suppliers or to exploring different insurance options, simply because they believe that the process is too time-consuming. But with the possibility of a Brexit drawing closer, it is essential that small firms make economies wherever they can so that funds can be redirected to keep business ticking over while there is so much uncertainty in the air.”
Plan ahead with all clients – “Planning ahead is key to the success of any business, but it becomes even more important, particularly from a financial point of view, when so much uncertainty looms. The prospect of leaving the EU means that a great deal of control will be taken away from small businesses, further complicating plans to expand or export. Foreign Currency Direct chief marketing analyst Jonathan Watson advised small businesses to put in the hard work now to solidify supply chains. “Exploring relationships with overseas suppliers and even UK customers that are likely to be affected by a Brexit seems sensible,” he said.
Explore international trading options – International trade is a tricky subject for many small firms. For micro businesses and one-man bands, the prospect of hopping on a plane to travel halfway across the world simply won’t be feasible. Even so, if relations with the EU do become strained, it’s vital that companies explore markets further afield. Having a diversified client base will be even more important…”
Massimo Gray, who advises architects and designers on business strategy, said there was a risk that clients and customers would hold back on placing orders, putting companies under severe strain.
“My biggest fear for the smaller businesses is that if, as a result of the loss of confidence and instability we are experiencing, we see a pull-back, or stalling on ordering, then this may cause an issue with cash flow,” he told Dezeen.
“A lack of cash flow for a business is like a heart attack. It can be very difficult to recover from; almost terminal.”
“It’s important to stick to, and reinforce, brand values, and remember that creativity has been the core driver for the business,” he advised.
“This creativity doesn’t need to change: in fact, we are probably going to need to harness it and focus it, even more, going forward.”
“The silver lining of the current situation was that the fall in the value of the pound made British products and services cheaper abroad,” Gray said.
“Clients can buy cheaper, or buy more with the same budget,” he said.
“The fall in the pound certainly makes exporting better. Overall Brexit is going to force us to be more resourceful and innovative, even more creative.”
“Any fracturing of Europe itself, and dissolution of the single currency may allow certain regions of Europe to become low-cost producers again, but no doubt there would be tremendous turmoil before we arrive at that.”
The creative industries are worth £84.1 billion to the UK economy each year, and the sector is growing at almost twice the rate of the wider economy.
What about you? – have you found any great ‘surviving Brexit’ information to share with your network? – we’d love to hear from you.
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