It may have been delayed another few months, and who knows when or if it will ever happen, but as the UK’s ungracious exit from the EU drags on with seemingly no end in sight, Scottish businesses are doing what they do best; making sure they get on with it.

HeraldScotland: credit: Google Imagescredit: Google Images 

Statistics released by the Scottish Government last month have the Scottish Consumer Sentiment Indicator at its lowest level ever (it has been negative since Q3 2016, ironically in part as that was the first quarter after the Brexit vote.) Adults surveyed for the indicator see household finances and spending habits becoming tighter. It doesn’t take a wider look at how we view Scottish business though.

As we loom ever closer to the day when the UK leaves the EU, and with the term “indyref” coming back into the fore this week, how are Scottish businesses making sure that they’re resistant to uncertain political and economic changes?

I had a look at some of the overarching commonalities to see how Scottish companies are becoming Brexit-proof, and how any industry looking to bolster themselves for H2 can be aware of what the lay of the land looks like from the outside.

Let’s start with one unknown truth:

We don’t actively trade

HeraldScotland: credit: Google imagescredit: Google images

11 years. That’s the whole length of time Scotland had a stock exchange in the 1960s. Back then it was still all about having people on a trading floor, but even since it merged with the London Stock Exchange in 1973, Scottish companies don’t actively go out there and get involved in stock markets.

Has it made us Brexitproof? Well, the value of the pound is nowhere near where it was just four years ago even with delays to votes and deals, but there are glimmers of a stock exchange closer to home focussed on having Scottish businesses get back into trading.

Project Heather is attempting to launch an exchange in Edinburgh; one that will “ be focused on businesses that are making measurable positive social and environmental impact”, something many Scottish companies will happily say they try hard to work towards.

We seek out private equity

HeraldScotland: credit: Google imagescredit: Google images

Because we’re not that interested in public exchanges (for now), we Scots are very savvy when it comes to garnering interest, and very good at being patient. The majority of funding for our companies is through private equity.

It’s still seen as a much more secure due to having institutional investors involved (examples would include the likes mutual and pensions funds) and with Scottish Enterprise evolving their grant options to larger business, along with widening the scope of what can be invested, it could be said we’re staying closer to home to seek equity.

And while private has been the way to go for a while now, we are slowly turning the tides with the likes of ELITE Scotland having launched on the LSEG this year to help fast-growing local companies navigate the waters of investment more easily.

We are wise to know where to get help

HeraldScotland: credit: Unsplashcredit: Unsplash

There’s a tendency in investment these days for a quarter by quarter approach where investors are keen to see a quicker return on investment, disregarding long-term strategies for quick wins.

That doesn’t seem to be the case as much in Scotland as companies, especially start-ups, know that getting into bed with the first interested party might not bear a fruitful relationship.

UK based companies are also much more likely to work with clear representation in equity. Established law firm Goodwin Proctor have noted how companies have been reaching out for help with adhering to private equity laws with the recent changes in reporting, something Scottish companies also need to do as a failsafe.

We know our neighbours are important

HeraldScotland: credit: Unsplashcredit: Unsplash

If you can cast your mind back to the not so halcyon days leading up to the 2014 referendum, a lot of doubt was cast over the Scottish economy’s level of output, or rather, what would happen to it. Enough though we know being able to trade in the EU is important with the likes of the Netherlands, France and Germany all in the Top5 countries we export to, the rest of the UK absolutely trumps them when it comes to exports.

And while it might be hard to get someone to accept a Scottish banknote in a shop, the rest of the UK is still our biggest trading partners, with Gov.uk highlighting that more than £45 billion exported in 2016 alone. It makes up over 64% of our total exports.

We are getting there

As with anything related to Brexit, there’s always uncertainty. But things close to home are looking better. The economy was up 0.3% in the last three months of 2018, and as we reported a few weeks ago, the unemployment rate continues to fall to an all-time low.

We may not know if and when Brexit will happen, but there are plenty of signs telling us we’re ready for it.

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