Is your business prepared for Brexit?

There is, without a doubt, a huge amount of uncertainty shrouding Brexit and its impact on the UK and, most significantly, its relationship with the EU going forward. Matters relating to the economy and finance, immigration and borders, healthcare and business are all likely to be influenced, but the degree to which they will be affected remains unknown.

While the lack of certainty adds an unwanted layer of stress to industries across the UK, business owners can mitigate the budding risks by preparing as best as they can, and as far in advance as possible.

A contingency plan is necessary – whether it is to address matters pertaining to imports and exports, legislative changes, or simply the desire to buy or sell a company during an unpredictable economic climate, a Plan B is a must to ensure business owners are in a position to handle a plethora of potential outcomes.

Here is a checklist of things you, as a business owner, ought to consider when it comes to preparing for Brexit and the future, wherever it may take us.

Manage your supply chain

Short-term or long-term, Brexit will have a high chance of wreaking havoc on your supply chains. According to the Chartered Institute of Procurement and Supply, roughly 63 per cent of EU companies are looking to let go of their UK suppliers, and 40 per cent vice versa in favour of domestic sources.

Due to the volatility in exchange rates, leaving the EU and making your supply chain local will minimise the amount of economic disruption whilst the Brexit aftermath continues to play out.

If, however, you feel this is not doable, it is worth investing some time and effort into strengthening your contractual relationships with the suppliers abroad. After all, a strong professional bond is what ensures the supplier sticks with you through thick and thin, and will enable you to establish a connection that surpasses the changes that Brexit may bring about in terms of trading legislation.

Address your workforce

Human capital is perhaps your company’s greatest asset, so it is important that you address each individual’s working rights and employment status within your company. If you have employees from the EU, they will be required to apply for settled status in Britain to continue working for your business or may risk deportation. Company HR departments can assist with application procedures and paperwork to ensure this process is as smooth as possible.

However, if settlement is not a viable possibility, there are a number of options you can consider. Hiring only British nationals or those who have already been granted settled status is one path you can go down, or you can arrange for your current EU staff to work remotely, thanks to the wide range of available technology that facilitates such activities. Regardless of which route you choose to follow through with, it is best to prepare well in advance so as to avoid any last-minute hiccups.

Be aware of changes to trade legislation

It is difficult to predict how trade legislation will change, due to the fact that it hinges on what kind of deal is negotiated between the UK and EU upon departure. In any event, you will need to read and update your business according so that it is compliant with the new legislation created as a result of Brexit; it may be that little will change, but it is nonetheless wise to keep aside some funds to address the impact should it have any unforeseen financial consequences to your company.

In the case that much alters during the course of negotiations over the next few months, your company will have to address the new regulations in order to continue its trading operations. Current guidance suggests that businesses look into registering for an Economic Operator Registration and Identification (EORI) number in order to continue its activities, so begin your preliminary research as soon as possible to avoid time-consuming and costly administration processes later, should they be an issue.

Buy or sell?

Buying or selling businesses is not a straightforward process even at the best of times, so with the uncertainty of Brexit thrown into the mix, it is unlikely that you can expect predictability in an already-volatile market.

As a business buyer, Brexit can influence a lack of confidence in the market, and a consequential unwillingness to commit to purchasing which can make the acquisition process that much harder. Similarly, sellers may face difficulties in achieving their desired price, and will probably have to engage in slow sales processes due to fickle buyers.

In spite of these shortcomings, sellers can rest assured that a strong business reputation and constant trade will bring the company its deserved recognition. Even during periods of economic change and instability, as Brexit has brought to the UK in the past two years, a resilient business strategy will allow the company to stand out from its competitors and survive an inevitable dip in value, making it all the more attractive to buyers in the long-term.

Buyers must remain flexible should they wish to make an acquisition, as Brexit may provide them with the opportunity to secure great deals. It is unlikely that every industry in the UK will be impacted in the same manner, but those specifically relying on trade with the EU could potentially be ideal targets. As well as maintaining flexibility, it is vital that buyers be vigilant and prepared to move quickly should the right business come to market in a spur of the moment.

On the whole, the changes that Brexit could bring needn’t be all doom and gloom. With the right amount of preparation, by planning for the worst-case scenario and by keeping your investments stable, your business will be able to ride out the Brexit storm, whatever shape or form it may take.

Looking for more industry insights? Take a look at our other articles:
Business trends to watch out for in 2019
The pros and cons of an IPO: should you go public?
Using invoice financing to fund acquisitions

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