Whether you voted for or against Brexit, it’s hard to resist the notion that the British government has handled the subsequent negotiations poorly. This has raised the prospect of exiting the EU without a viable deal, which would scarcely have been thinkable just one year ago.
This is bad news for the business world, with SME’s, in particular, struggling to cope with the prevailing uncertainty. It’s also causing the tide to turn in terms of small business confidence, with a growing number developing an increasingly negative outlook as time progresses.
While the future may look decidedly bleak at present, however, businesses have the opportunity to adopt a proactive approach and prepare for the worst case Brexit scenario. Now, although preparations will vary depending on the scale of your business and its relevant market, of course, there are some universal measures that will help to safeguard your interests.
These include:
1. Reducing Controllable Costs
This should serve as a starting point for all businesses, as they begin to focus on the operational aspects and management costs that sit within their control.
For firms that operate a commercial fleet, for example, a number of steps can be taken to reduce costs incrementally. Fuel is the largest contributor to vehicle operating costs, for example, while a no-deal Brexit would cause the price of diesel and gasoline to soar.
So, investing in more fuel-efficient vehicles could offset this risk, as could utilizing route-planning software to minimise distances travelLed.
Firms should also take proactive steps to reduce long-term costs, such as unscheduled maintenance to resolve costly electrical and mechanical faults. This is particularly true in the case of used BMW cars (or similarly premium models), as these vehicles are more likely to develop expensive faults over time.
Investing in an extended BMW warranty can also provide some much needed additional cover, especially as standard manufacturer warranties only last for a period of three years.
2. Review your supply chain
Perhaps the most understated, and arguably biggest, consideration for SMEs’ post-Brexit is the validity of their existing supply chain.
If your supply chain has deep integration with the common market and the EU’s regulatory measures, for example, or relies heavily on the presence of the existing customs union, you’ll need to proactively review your method of operation and potentially seek out an alternative strategy.
Even without a deep or obvious integration, there are bound to be linkages if your firm operates within the boundaries of the EU, and these could impact significantly on the timely delivery of your products.
The introduction of border check disruption and new bureaucratic hurdles could also be impactful, so you’ll need to identify these issues ahead of time and take steps to resolve them.
3. Take a look at your workforce
While the so-called ‘Brexit whitepaper’ laid out the government’s stance on a number of issues, this document lacked the clarity that many craved.
One of the key areas of confusion surrounds the rights of EU nationals living within the UK, with the process for obtaining settled status still undetermined.
This not impacts directly on EU nationals throughout the UK, but it also created considerable uncertainty for SMEs that employ a geographically diverse workforce and rely on a steady supply of talent from the single market.
With this in mind, companies should begin to review the workforce if they haven’t already, both in terms of potential turnover and likely changes to existing cost bases post-Brexit. This should help firms to create viable plans for the future, and pre-empt any issues before they occur.
This type of approach will become increasingly crucial as time progresses, particularly with the UK seemingly no closer to achieving a desirable or even workable deal with the European Union.
