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SMEs and issues of the day...dud election outcome...Brexit uncertainty...Trump’s frightening.(And what is a Quexit?)

In our recent panel research, business owners had plenty to say about some of the issues of the day – in particular the Federal Election and Brexit.
The Federal Election is uniformly viewed as having produced a poor outcome – one that will see continued uncertainty, pandering to minorities, and broadly speaking, populist
politics.  They think this will only add to the prevailing uncertainty in the economy.
While most SME Operators think Brexit will have no meaningful impact on Australia, a few of those that have European (especially British) operations do believe there will be an impact on their business.
In the meantime, Donald Trump is viewed with bewilderment.
The challenge that SMEs see from such factors is that they create further uncertainty …
(Property Development/Investing 80 FTEs)“It’s not easy raising money.  That’s the challenge at the moment – things like the election, Brexit, terrorism overseas – there’s no direct impact on us but there is an indirect impact and that is that people stick to cash – they don’t invest.”
“I think that Brexit and Trump have stripped us of faith that ‘wisdom will prevail’ – I think it will lead to a lack of confidence in bigger institutions – so short term gain rather than long term investment will be the preference of people.” (Entrepreneur, 6 FTEs)  
“With Brexit, the fall of the pound may impact us substantially from September.  We’ll become too expensive so we’ll either lose margin or sales.  But the whole Trump thing is totally screwed up, I don’t know where that’s going to end.  I’ve been to the US three times already this year and I can say frighteningly, he’s more likely to win than most Australians think.”  (Gin distillery, 15 FTEs)
“There’s just so much uncertainty out there, so much unrest globally and it impacts on sentiment even if it doesn’t directly impact Australia.  That’s the clear theme I’m seeing … It’s almost like people are waiting for something to happen.” (Property Funds Management, 6 FTEs)
Of course there’s nothing like an insipid election result to underwhelm business owners …
“Well I don’t think there’s a lot of confidence out there, we’ve just had an election and there’s always talk about health and superannuation and people get nervous … People seem constantly alarmed, the health funds seem to rise 6% a year, so that has an impact on sentiment in our sector I think.” (Physio, 40 FTEs)  
“I can’t help but feel we’re stuck in a rut and it’s very much the status quo.  I don’t think Turnbull will have the guts or energy or desire to do anything large.” (Printing, 75 FTEs)
“Even though we had a good year, we did notice that June was quiet and that’s always the case with an election, things quieten down for that month … More broadly I think that the Libs will be pandering to the namby pambies in the senate and so nothing will get through – it will be like it has been before.” (Storage 45 FTEs)  
“I think people are a bit weird at the moment … I think the election run-up lasted far too long and people seem to lose their perspective … Even my alterations lady, the day that Turnbull was announced as PM she said to me ‘oh well I won’t be able to go to the doctor anymore’.  So the Mediscare campaign worked on her! – she was under the impression that she couldn’t go to the doctor anymore.  That’s just crazy.” (Retail Clothing, 2 FTEs)
Brexit has captured the attention of SME Operators.  Most think it won’t have an impact on their business, or Australia more broadly, yet others disagree …
“Brexit WILL have an impact on us.  We’ve just moved a warehouse into the UK and the timing wasn’t great.  I don’t really expect much of a change in the next couple of years but in the longer term we’re concerned about the sort of access that the UK will have into Europe.  We’ll wait and see … We were going to open an office in the UK but we’ve put those plans on hold.”  (Import/Export swimwear, 15 FTEs)
“Brexit will create opportunities I think, I’m not convinced it’s so negative.  They were so tied in with one body and they really had lost control over running their country themselves – just like the rest of Europe … In our case we will be establishing an office in the UK soon.  [Q : Brexit hasn’t put you off?]  Not at all.  You’d be insane to set up an office in France, did you know that if you want to get rid of a senior executive in France you’re basically up for two times their annual salary? … Brexit will free up decision making in the UK I think.” (Engineering, 95 FTEs)
“I’d like a Quexit.  Get rid of Queensland, or more the point, all the di*khead politicians they have up there.” (Home Loan Provider, 13 FTEs)  
Donald Trump ‘speaks for himself’ …
“I think the whole Trump thing is quite fascinating, but the guy’s a complete nutter I would have thought.” (Business Consultant, Sole Trader)
“Trump is a lot like Pauline Hanson – objectionable on just so many levels – but at least he believes in what he’s talking about, so I give him credit for that.  Pauline Hanson does too.” (Retailer, 25 FTEs)

SMEs are operating in a fairly subdued economic environment.  Issues that would appear to have no direct impact on Australian businesses DO have an indirect impact because they undermine confidence.  Business owners feel disappointed by the tenuous nature of the Liberal victory in the Federal Election.  Combine this with Brexit … the possibility of a Trump Presidency … world terrorism … and it is no surprise that SMEs are cautious.    
The implication for SMEs is that they don’t expect macro-factors to offer any relief in their business.  They have to work harder and smarter to see improvements.  ‘If it’s to be it’s up to me’ is the mood of the SME Operator.  At least they’re not waiting and wondering – they are taking control of their businesses.
Next month : What changes are SMEs making to work smarter in their business?
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