Political instability hits small companies hardest
Large political shifts – particularly unexpected ones – bring great uncertainty to the commercial landscape. As the UK begins to work out the full ramifications of its decision to leave the EU, and with the very real possibility of Donald Trump becoming US president, companies are going to need to build plenty of flexibility into their forward planning in the coming months and years.
Dealing with the inevitable regulation and policy changes produces headaches for the legal and regulatory affairs departments of large companies. But for small and medium-sized enterprises (SMEs), the impact is potentially even greater.
For a company with a handful of employees, working out how your product fits into the complexities of existing legislation is hard enough. Add into that a rapidly changing and uncertain environment, and it would be easy to feel inundated. As uncertainty builds, suppliers and customers become less willing to commit to long-term agreements. Investors become more wary. Exchange rate swings can wipe out profit margins. Just staying afloat in the short term can stretch a company to breaking point.
Entrepreneurs are rarely the type of people who relish trawling through legal documentation. That said, knowing when to ask for help is a key factor in building a successful business – as demonstrated by this year’s Chemistry World entrepreneur of the year, Sygnature’s Simon Hirst. So where can SMEs turn for assistance in a storm?
Professional consultancies are the formal option. Because they’re dealing with the relevant systems day-in and day-out, and their business depends on the quality of their advice, they should be able to provide good quality guidance. If you can afford it. And that’s the issue – in an environment when everything is already squeezed, finding money for consultancy fees is not necessarily possible, never mind easy.
Collective knowledge can help – clubbing together with a network of companies in a similar situation can help to provide stability, and divide the task into manageable chunks. Support networks like the Royal Society of Chemistry’s EnterprisePlus scheme can also provide guidance on the best ways to access the appropriate information.
But even with such support, the shifting seas of a commercial environment in turmoil are a hazardous place for small boats. While the bigger ships may ride out the storm, it’s important not to forget the role of the little guy. Given the key role SMEs play in numerous chemical value chains, we can’t afford to let many of them sink.