Brexit Turmoil Makes Britain a Bargain for U.S. Businesses Brexit has created a buyer's market for U.K. talent and real estate but you'll need help navigating the uncertainty.

By David Nicholls Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Christopher Furlong / Staff | Getty Images

The momentous Brexit vote has come and gone. The verdict: the United Kingdom is slotted to leave the European Union (EU) as soon as it chooses to invoke Article 50 of the Lisbon Treaty. The U.K. is now on the precipice of being on its own after 40 years of aligned economic policies and regulations with the EU.

The effects on international business are already being felt.

In the hours following Britain's vote to leave the EU, the Sterling reached a 30-year low, with investors becoming wary as they pivot from positions that expected a "Remain" result. In the same vein,the S&P Global Broad Market index (BMI) has fallen almost 7 percent and the benchmark U.S. index has lost 5.37 percent in the last few days, just to name a few noteworthy changes. But what does this all mean for small businesses?

Top-notch talent for less.

It's not all bad news. The U.K. is home to some of the world's most prestigious universities including Oxford, Cambridge, St. Andrews and Imperial College, London. However, due to the economic instability, U.K. employers will likely hold off hiring for the short term, meaning that U.S. businesses can take advantage of the strong dollar to hire seasoned, in-country professionals and experts at a much lower rate than a month ago. Even after factoring in the extra accounting and legal costs associated with international labor, American small businesses will gain access and the opportunity to pay fair compensation for top-notch talent in an otherwise inaccessible market, especially when compared to expensive domestic labor markets such as New York and the San Francisco Bay area.

Related: Brexit: The Risks and Opportunities for American Entrepreneurs

Tighter purse strings.

Global market volatility may continue. While the U.S. has managed to maintain steady growth, once the U.K. pulls the trigger on exiting uncertainty will again reign, which will almost certainly lead to a tightening of capital markets and bank lending. Companies looking to expand into -- or within -- the U.K. and EU in the next 12 months should consider alternate routes to capital, whether through private equity or other companies. Additionally, exploring the possibility of joint ventures with companies already located within these regions could be a way to avoid the high costs of market entry.

Upside for professional services.

A big impact of Brexit is the rules and regulations that will change once the ties between the U.K. and EU are severed. The free movement of people and labor will change, as will working time directive. Under EU law it is currently illegal to make an employee work more than 48 hours a week. Other rules, such as water cleanliness and even regulations that restrict how many bananas can be sold at a time, might also come up for renegotiation.

Each and every change will mean that, as a small business, you will have to understand the nuances that are currently in place and how any changes will impact your business. Due to the complexity, the need for professional services will increase. Those that can explain the jargon - lawyers, accountants, etc. will experience a surge in business as clients look for advice and clarity.

The power of the dollar.

Despite the resulting negative effects, small businesses can benefit from the global market volatility caused by the recent Brexit results. U.S. dollars go further with a weak U.K. pound. For a small business, as the value of the pound continues at a low, small businesses can reap the reward as their buying power increases. American real estate buyers are also in luck. A depreciated pound and Euro makes it easier to purchase real estate in foreign countries. Some areas, particularly in the Eurozone, offer extremely attractive bargains from vacation homes in the South of France to new European hubs in Barcelona.

David Nicholls

Head of Payment Solutions, OFX

David Nicholls is head of payment solutions at OFX, a global payments company that helps SMBs send money to more than 190 countries, with 24/7 transactions and customer support and better-than-bank exchange rates. 

 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

A New Hampshire City Was Named the Hottest Housing Market in the U.S. This Year. Here's the Top 10 for 2024.

Zillow released its annual lists featuring the top housing markets, small towns, coastal cities, and geographic regions. Here's a look at the top real estate markets and towns in 2024.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

'We're Not Allowed to Own Bitcoin': Crypto Price Drops After U.S. Federal Reserve Head Makes Surprising Statement

Fed Chair Jerome Powell's comments on Bitcoin and rate cuts have rattled cryptocurrency investors.

Business Ideas

Is Your Business Healthy? Why Every Entrepreneur Needs To Do These 3 Checkups Every Year

You can't plan for the new year until you complete these checkups.

Leadership

The End of Bureaucracy — How Leadership Must Evolve in the Age of Artificial Intelligence

What if bureaucracy, the very system designed to maintain order, is now the greatest obstacle to progress?