Brexit has affected everything from the value of sterling to
the colour of our passports, and
whilst the public will need to be aware of the
exchange rate for their upcoming trip to Spain, it is British business owners
who need to prepare for a future separate from the EU with an increased sense
of urgency.
Although it is optimal to create strategies at least a year
in advance, sometimes political events call for a greater level of urgency and
this article details ways in which business owners should be accounting for the
Brexit fallout in their business plan over the upcoming 12 months.
Implement Corporate
Customs Infrastructure
With a potential fivefold
increase in the number of custom declarations post-Brexit, having a team
dedicated to getting your company ‘Brexit-ready’ is going to be of the utmost
importance. The lead time for updating business operations software can take
longer than expected. Moreover, if you are a company wanting to trade across EU
borders you will also need to ensure internal systems are compatible, not only
with the EU’s customs technology, but also with the new UK system.
Be Ready For Anything
and Everything
There is no use having detailed contingency plans for one scenario and having nothing in place for alternate potential
outcomes. Analysing and assessing the landscape and the how changes will affect
your own market is essential. This could be anything ranging from considering whether changes
to import taxes and VAT will mean you need to explore options for a cheaper
supplier, or assessing the need for a new office in the EU once Britain has
officially exited the union.
Current & Future Staff Assessment
Once the above issues
have been fully investigated, the next area to focus upon is staff. Are there
people in the company from the EU? Will
they be staying and if not, what is your plan for recruitment? Is the business well-equipped to pay increased salaries, for talent spotting and training
new personnel? Once the business is prepared for these eventualities, it is also important to review the HR department and make sure that you have no weaknesses when it comes to new
employment laws and regulations.
Maintain and Increase Cash Flow
To stay afloat of a jittery currency and remain resilient in a turbulent
market, it is imperative that you have a financial cushion in place. Lessons
can be learned for example, from Irish mushroom exporters who rely on the UK
market for as much as 80% of exports. Within four months of the Brexit
referendum, 10% of all mushroom farms closed as they had not forecasted and
budgeted enough capital to cope with wild sterling fluctuations. This is when financial
planning software becomes essential as it allows business owners to manage
their finances, make cuts where necessary and increase cash flow in order to
withstand blows dealt by the current political climate.
Prepare for Border
Control Delays
In 2005 after Australia introduced new customs procedures, the flow of goods buckled after just two days, leaving the country short of medical supplies and toys ahead of Christmas. While it is hoped that history will not repeat itself next year, there is no guarantee that there will not be delays. Before Britain steps foot out of the EU, make sure that the the company's warehousing has enough capacity for increased stocks in preparation for a bottleneck at Dover.
When it comes to Brexit, nothing is certain at the present time, however in order to withstand this increased level uncertainty, it is important to be proactive. There is no
time like the present to be preparing for changes to customs requirements,
software updates and building your inventory ahead of potential border pile
ups. To be ready to tackle issues head on if and when they arrive, it is also important to assess potential obstacles, keep your team fluid and most
importantly ensure that you have a budgeted a fall-back fund for worst case
scenarios.
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