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Brexit Planning for SMEs

 

 

A couple of weeks ago we revealed that more than two thirds of Britain’s small to medium businesses (SMEs/SMBs) still have no specific plan to prepare their company for Brexit.  With Brexit fast approaching (29th March, 2019), ignoring Brexit is not a particularly business savvy strategy – you really do need to make some plans now.  With the government still in the thick of negotiations and discussions with the European Union on Brexit we still seem to be floundering under a cloud of uncertainty which certainly doesn’t make it easy for small business owners to plan when there is still no certain plan in place for the nation as a whole.  However, there are some proactive steps you can take to make the transition easier for you and your business.

Although the future seems uncertain right now, don’t be tempted to wait until all the negotiations have finished before formulating a plan.  While many companies are unsure of the financial impact that leaving the EU will have, keeping overheads to a minimum right now and building reserves will mean that additional costs post Brexit don’t come as too much of a shock. 

Businesses that import and export across the European Union will need to consider how the new regulations will affect their trading.  There are likely to be changes to tariffs, border controls and some delays in importing goods, all of which could result in a limited stock supply.  Preparing for this buy have stocks in reserve will help your business weather the first wave of problems.

Do a thorough review of your supply chain and how it integrates with the common market and the EU.  Where you identify significant links, review the sensitivity of time delays (for example short term border check disruption in the first months post-Brexit, as well as more bureaucratic hurdles) and look at price fluctuations and risk from divergence in standards. 

Review the skills and sales profiles of staff and applicants and consider how these may be affected by various Brexit decisions, such as “no deal”, a comprehensive economic and trade agreement, or remaining in some form of customs union.

If possible, start cutting management costs now with a particular focus on those that can be controlled.  If your company depends on vehicles, then fuel is probably your largest element of vehicle operating costs and any potential adverse impact on the foreign exchange will have a direct impact on oil prices, which will increase fuel prices for both businesses and consumers. 

A continuing absence of any guidance on the process for obtaining settled status has resulted in EU nationals in limbo about their future.  This is having a knock on effect across the whole UK economy, particularly SMEs that employ and rely on EU workers.  If you employ EU workers, then it’s vital to carry out an audit on the immigration status of them to identify anybody who would be able to apply for settled status under any new immigration controls.  Make sure there is a plan in place to protect and assist these employees – they will feel valued and will continue to ensure that they contribute to the growth and productivity of your business.

We will carry on scouring the news on Brexit in the coming months and make sure that we keep our readers fully informed on developments.  Don’t miss out on any news that may affect you and your business, follow us on Facebook and Twitter so you’re notified when the news comes in.