How will Brexit affect business?

A key challenge for UK business is uncertainty and since the EU Referendum in June 2016, there's been much for small and medium sized enterprises to contend with. Brexit is an ever changing situation so it's difficult for businesses to prepare for the potential outcome. Nonetheless, irrespective of whether you trade domestically, internationally, or both, Brexit is likely to impact your business in some shape or form.

Having left the EU on 31 January, the UK has now entered an 11-month transition period. While the UK remains in the EU's customs union and single market and continues to obey EU rules for now, there are some practical steps you can take to future-proof your business, through the Brexit process and beyond.

We support more than 12,000 worldwide, and to help our clients and business partners to prepare, we have compiled a series of guides and resources.

Overcoming key challenges

The most important thing is that you start scenario planning, which will enable you to consider how the potential outcomes could impact you both now and in the future.

Here are our top three tips on what you may wish to consider over the coming weeks and months:

1. Supplier relationships

If your business is anything like ours, supplier relationships are key. It’s important that you consider how Brexit (either a deal or no deal) could impact your EU and non-EU suppliers. This may be in relation to the goods and services they provide, and how any changes to tariffs and customs could impact costs and timings.

If you’re importing goods from within the EU, you may wish to register for Transitional Simplified Procedures (TSP) to prepare for a no-deal scenario.

Additionally, in the event of a no-deal outcome, you’ll need an Economic Operators Registration and Identification number (EORI number) to move goods into or out of the EU (including the UK).

Further practical advice on declaring goods at customs in the event of a no-deal is available on the Government website here.

2. Foreign exchange

Changes in the global political landscape have impacted currency markets significantly over the past year. For businesses that buy and sell overseas, currency fluctuations can increase input costs and reduce profitability hugely. It’s therefore important to keep an eye on currency and market fluctuations to protect against such impacts.

Foreign Exchange providers can help by locking-in rates to protect against further currency movements.

You can find out more about how we’re supporting our clients with our FX sevices here.

3. Managing cashflow

Our own research shows that since the EU Referendum an increasing number of businesses are struggling to effectively manage cashflow. Additionally, we know that more businesses today are suffering from bad debt, due to non-payment from customers.

It’s for these reasons that we have pledged our commitment to the Government’s SME Finance Charter, to ensure that SMEs can access the cashflow solutions they need to support their business through Brexit and beyond.

Speak with your finance partner about the options they can offer to help alleviate challenges associated with cashflow issues. Some will offer specialist import (Trade Finance) and Export Finance services, helping you to trade overseas with confidence.

Additionally, some providers will offer bad debt protection to ensure that your business is insulated against the impact of customer non-payment or protracted default.

You can read more about the cashflow solutions we provide here, including our support for SMEs trading overseas.

Our support guides

If you’d like more detail about how to overcome some of the challenges above, check out our helpful guides and online resources below.

Alternatively, you can speak with one of our SME experts about how we could support your business, by calling: 0808 501 6451.

What are other businesses doing to prepare?

As family business supporting SMEs for more than 35 years’, we have unique insight into how our clients and business partners are preparing for Brexit. Here are some of the changes our clients have made to prepare for the UK’s departure from the EU:

Our strategy when it comes to Brexit is to hope for the best, but plan for the worst. Expanding into markets like Japan and the USA should not only provide new revenue streams for the business, but also reduces our reliance on markets that may be more exposed to Brexit. We can’t continue to hang onto every word of the Brexit negotiations and futureproofing our business is a key priority for us.
Mark Clifford, Founder and Managing Director of Clifford Sells

Brexit has had a significant impact on our business. With a large proportion of our revenue stream being generated here in the UK, we have been adversely impacted by the fall in the value of the pound, resulting in our cost of goods increasing. As a result we have had to review our business and see where we could save on costs. In some instances this has involved us changing our manufacturing providers in China to ensure we have a more price competitive business.
Andrew Shepherd, Managing Director, ABP Technology

SME Confidence Tracker

Our SME Confidence Tracker assesses the sentiment of 1,000 businesses each quarter on a range of topics, such as sales volumes, investment and access to finance. We’ve been running the Tracker since January 2014, so the report offers genuine insight into how Brexit has impacted businesses like yours.

You can download our latest SME Confidence Tracker here.

Alternatively, our Global Business Monitor report, including data from 13 regions across Asia, Europe and North America, can be downloaded here.

Other Brexit-related resources

There are a host of resources available to businesses like yours in helping you to get ready for Brexit. Here are some we think are particularly useful:

Speak with one of our team today 0808 196 1692

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Preparing your business for Brexit – our support for SMEs