With the announcement of a general election taking place in December, it has thrown the UK into even more uncertainty in the midst of Brexit negotiations. Small businesses in particular can feel the pressure of a looming Brexit deal (or no-deal) and now a general election on its way.
For many small business owners, a forthcoming general election could add to their worries surrounding business growth and success. In our latest blog, we take a look at some of the ways the election could affect businesses, including:
- Customer confidence
- Legislation and tax
- Currency instability
- Marketing strategies
When anything important is announced in government, it causes a shift in confidence amongst the public. Many markets grind to a holt, including many businesses, as people wait to hear the outcome of an election.
Based on previous general elections, customer confidence often drops off the closer it gets to an election date. This is usually down to the uncertainty and apprehension surrounding the event. Many businesses will delay any major decisions until after it has occurred, with some even taking longer to recover depending on the result.
Legislation and tax
This can be a concern for many businesses as there is always the possibility that legislation and tax rules may impact different industries. The electoral decision is usually split between a low-tax, low-spend and a high-tax, high-spend economy. Any changes to tax may only appear small, but they could have a huge impact to businesses.
What’s more, during election run-ups, government are not able to make announcements or changes that could hinder or benefit candidates or parties. This means businesses are unable to make plans based on certain legislation, as it may change.
This period of limbo could leave many businesses feeling unsure of their financial projections until the result has arrived.
The value of the pound can fluctuate hugely against other major currencies during the run-up to an election, and again when new policies are announced. This can put pressure on any business that deals in goods or services from overseas.
For those who deal with overseas suppliers or sell to companies in other countries, currency instability can cause a real headache.
Trying to advertise your business, announce a new project or launch a great marketing strategy can feel impossible during the run-up to an election. An event that has such national significance can often dominate all media channels, which can result in an untimely occasion for your announcements.
If your business already had some exciting things in the pipeline, the announcement of a general election could put the brakes on it very quickly. This can impact some industries as it can hinder their upcoming projects or render their advertising strategies useless.
Posted on November 16, 2019 | election, brexit