If you haven't heard of Brexit then you are probably living under a rock. Most of the financial world was rocked this Friday as British voters decided to leave the EU. The pound dropped to it's 30 year low, and American stocks tanked as a result.
What it means for small businesses is that there is likely to be some ripples across the pond," said Richard Williams, director for regulatory studies at George Mason University. He also believes that some of the ripples, at least, could be good for American businesses.
A deep dive into why the EU referendum ever happened was British frustration at Brussels. Brussels is where all EU regulation is written and decided. A lot of British small business owners were fed up with choking regulation that made it hard to smart and maintain a business. I'm sure small business owners in America can relate.
The hope is that US Congress will see the signs and perhaps reconsider some business-killing regulations that they are either considering, or have already passed.
There is also a definitive downside to Brexit for a lot of American businesses unfortunately. A lot of analysts are worried about what the affect will be on Europe's economy as a whole. With an already weak economy, it won't take a lot to stall growth and put most of Europe into an economic recession.
JJ Kinahan, a strategist at TD Ameritrade, believes that the weak markets in Europe could easily transfer over to the US. When such a huge economy starts to stumble, the effect is usually felt worldwide. As Europe buys less, many US companies sell less, and the result is a worldwide recession.
As a small business owner in America it would be a good idea to understand the driving forces behind the world markets. There are a few key points to watch on the US stock market, that if broken could signal a long economic downturn. Technical analysis teaches us that if the S&P 500 breaks below a certain number this year, markets will likely tank as sentiment turns bearish. That point is about 182. As long as markets can stay above that key figure, chances are that our economy will recover relatively quickly.
As a small business owner there are a few ways to react to current conditions. One is to adjust your audience. If you are focusing on Europe and England in your sales efforts, it may be time to start looking elsewhere. The pound has lost a lot of value in the last 76 hours and buying just became a lot more expensive. Looking at the euro, there is a good chance of the same happening.
The best thing you can do, however, is not focus on Brexit. As a small business there are millions of things to worry about and stress over. Chances are decent that Brexit will not affect you as much as you think, and there are definitly things to worry about more.