Almost a third of British businesses could be forced to move operations abroad because of Brexit, research among company directors showed.
A survey of 1,200 senior businessmen and women by the Institute of Directors found that 16 per cent already had relocation plans, while a further 13 per cent were actively considering doing so.
More large companies had already moved operations, but small firms were almost twice as likely to be actively considering the prospect, the study suggested.
It came as the Institute for Government (IFG) said the UK is unprepared for a no-deal exit as there would be "extremely damaging" disruption.
The think tank predicted that in eight out of 11 broad policy areas, including health and borders, the Government would be unable to avoid "major negative impacts".
Edwin Morgan, interim director general of the Institute of Directors, said: "Change is a necessary and often positive part of doing business, but the unavoidable disruption and increased trade barriers that no deal would bring are entirely unproductive.
"While the actions of big companies have been making headlines, these figures suggest that smaller enterprises are increasingly considering taking the serious step of moving some operations abroad.
"For these firms, typically with tighter resources, to be thinking about such a costly course of action makes clear the precarious position they are in."
A Government spokesman said: "We want to protect jobs and the economy as well as provide certainty for businesses and individuals as we leave the EU. The best way to do this is to leave with a deal, and that's what we're focused on doing.
"The strong economic foundations we are putting in place through our modern Industrial Strategy are part of the reason the UK was recently rated the best place in the world for business, and saw more than £100 billion of Foreign Direct Investment in the last three years, more than France and Germany combined."
Additional reporting by PA
