Impacts and challenges
Every business faces challenges. However, the ones facing European firms are around recruitment and finding new markets, rather than problems servicing debt or accessing finance.
While trade disputes, Brexit and the state of the global economy often steal the headlines, they are not front of mind for many SMEs.
In fact, our research shows that recruiting skilled staff is the biggest challenge facing European SMEs at the moment, with seven countries including this in their top three concerns. Following that, maintaining market position (a major concern in six countries surveyed) and finding new customers (a major concern in five countries).
By comparison, 14.5% of businesses are concerned about accessing financing such as overdrafts or loans. One in seven (14%) are concerned about their local economies performing poorly, and only one in 10 (11%) are worried about servicing existing debt.
According to our research, the biggest perceived challenge among French SMEs is recruiting skilled staff (40%). German firms also see this as their largest problem, with almost one in three (31%) saying it is their largest concern.
What are the three biggest challenges the business faces at present?
In Spain, finding new customers and recruiting skilled staff are the biggest challenges - 37% and 36% respectively. Likewise, in Italy 36% of decision makers see finding new customers as their biggest issue.
In Portugal, the top two challenges are a concern to a higher than average number of businesses: recruiting skilled staff (42%) and maintaining market position (40%).
Brexit in context
While Brexit has generated a lot of negative headlines, European firms are divided on what it will mean for their business.
A quarter (24%) of the senior decision makers surveyed say Brexit is one of the biggest challenges the business currently face, with a similar proportion saying access to foreign markets is a challenge (24%) and the uncertainty caused by potential political change (23%).
While a third (34%) of UK businesses in the study rank Brexit as a big challenge compared to just 12% of those in Italy.
Critically though, most decision makers do not think it will have a negative impact upon their businesses. Half (46.5%) think Britain leaving the European Union will have a positive impact on their business while a quarter (25%) think it will have no impact. This means 72% of businesses believe Brexit will be positive or have no impact, whereas just under quarter (24%) think it will be negative.
These findings suggest that while Brexit is on the minds of many, most are not in fact that worried about the prospect of the UK leaving the EU. Regionally, the Republic of Ireland is most optimistic about the impact of Brexit, with 62% of respondents saying it will have a positive impact. This is followed by Germany (59%) and France (54%).
The notable exceptions are Denmark and Portugal where a higher proportion say it will have no impact (38.5% and 38% respectively).
How will Britain leaving the European Union impact your business?
46.5% believe it will have a positive impact on their business