Andrew McCulloch is an adviser, investor and Non-Executive Director, based in London. 

Entrepreneurial Spirit was created as a creative outlet to share stories and lessons learnt from over a decade in investments and working with entrepreneurs. 

What does Brexit mean for entrepreneurs?

What does Brexit mean for entrepreneurs?

What does the principal of a finance startup and a hairdresser have in common? Apart from both running a business, they were at the High Court on Tuesday to challenge the British legal constitution in order to force greater scrutiny by Parliament on a treaty with the EU.

This highlights that a wide range of entrepreneurs of small and medium sized businesses are concerned about what Brexit might mean for them and the future of their business. Big businesses are affected too, although their diversification, resources and capabilities make them much better prepared to navigate such unexpected scenarios.

In the business world, the rearview mirror is always clearer than the windshield.
— Warren Buffett

Investors seem to be hanging on every word too, as once Article 50 is triggered, it is a 2 year process for which we are currently ill-prepared and from which there is likely to be no going back. Comments by the Government Attorney James Eadie moved the pound 1% on Tuesday, after he said that any treaty would "very likely" have to be ratified by both the House of Commons and the House of Lords.

Uncertainty is the only thing that is guaranteed

Unfortunately, it is this uncertainty that is driving current markets and business decisions. Now if there is one thing that business hates, it's uncertainty. It erodes confidence to invest, hire new staff, develop new products and acquire other businesses.

In fact, nearly 4 months after the EU Referendum, we are still no closer to an understanding of what Brexit actually looks like. If Brexit were a place, it would be Limbo and never before have so many people voted for something so undefined. The politics that drove us to this could be a post in their own right, but I'll leave that to the experts.

The main shock we have seen so far has been the dramatic move in the value of Sterling, which is now at historic lows against many major currencies, not least Europe, who we do a lot of business with.

As a result of the fall in our currency, there are winners and losers:


  • UK businesses that export - British brands that export abroad have seen large increases in sales, examples include Burberry who announced higher than expected profits as their products are relatively cheaper abroad
  • UK current account deficit - The UK deficit which was such a focus in previous years and the General Election had reached 7%, however, since Brexit, this is expected to reduce to 3.9% by the middle of next year
  • UK equity investors - The UK stock market has reached new all-time highs, although this has been driven by the relative attractiveness of UK equities for foreign investors, as the UK's largest companies are actually valued at a 4 year low in US Dollar terms
  • Tourists visiting the UK - Tax free spending jumped 37% in August compared to a year earlier, as the whole country had a sale for foreign tourists


  • British consumers - Inflation has already started increasing and could be more than 2% by next year and with interest rates at historic lows, it means our money won't go as far as it did before 
  • Businesses that buy parts and materials abroad - A business that relies on foreign part suppliers for their products will have to pay more for the same amount of parts. This may force them to look for domestic alternatives
  • Savers - The Bank of England reduced the base rate and banks have been quick to drop their interest rates, thus making savers even worse off than before, particularly when inflation is higher 
  • British tourists holidaying abroad - That holiday you are planning has already become 10-18% more expensive and unless you plan ahead, you could be paying one for one on some currencies at the airport or using your debit / credit card whilst abroad
  • Inward investment into the UK - The UK has been a robust place to do business and has punched well above our weight in terms of attracting investment from foreign companies to set up European, or global operations

Where do we go from here?

Our negotiating strength will be an important aspect of this process and will play a big part in the outcome. Any sign of weakness in our economy or corporate landscape between now and March 2017 could mean that our political bargaining power is reduced.

It is therefore vital that we move forward with cautious optimism and don't let the media hyperbole frighten us into submission. Confidence is important and most of all when faced with change.

For business owners and particularly SME's, where a lot of their wealth is locked up in a corporate entity, this can create a threat to the very future of the business. It is therefore sensible to take action now and spend time stress testing your business plan in a range of scenarios.

In sport, preparation is key and if you prepare in advance for a range of scenarios, you'll know how to react when the time comes and there is an unexpected outcome. So by undertaking a thorough review and having a flexible plan now, you can move forward with confidence and ensure that you are mitigating risks where they might occur.

Here are some tips for making sure you don't get caught out:

  1. Assess where the risks and opportunities are in your business 
  2. Identify opportunities to diversify income streams, or find new markets for your products and services
  3. Invest rather than sitting on cash, as inaction may leave you lagging behind your competition when the dust settles
  4. Seek alternative suppliers where it is viable to reduce overall and marginal costs 
  5. Take advantage of current trends
  6. Seek partnerships or joint ventures 
  7. Identify ways of mitigating currency risk and seek advice where necessary
  8. Consider raising money to finance change, or even the sale of the business to a strategic buyer
There are risks and costs to action. But they are far less than the long range risks of comfortable inaction.
— John F Kennedy

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Decisions, decisions - Why you might be overthinking it

Decisions, decisions - Why you might be overthinking it