Is your business ready for Brexit? How to prepare your business

posted by 3 years ago in Features

With Brexit looming every business is facing a period of uncertainty, with many wondering what Brexit will mean to them. Whatever the outcome of Brexit, it is likely to have an impact on your business.

The current Brexit situation

Although the UK was originally planning to leave the European Union on 29 March 2019, an extension was granted until 31 October 2019. However, Boris Johnson the prime minister called a general election where the conservatives secured the majority vote and Brexit has been extended until 31 January 2020. Although the government aims to leave the EU with a deal, it is important to plan for every possible outcome.

The impact on your business

Even if your business does not trade outside of the UK, there is likely to be an impact both in the long and short term. The main areas within every business which will be directly impacted are the supply chain, your customer base, international trading and the workforce.

Every business is different so there is no specific guidance which can be offered, although there are practical steps you can take to cushion your business from any negative impact.

Businesses which export to the EU

Currently UK businesses are able to export to the EU without any tariffs, as the country is a member of the customs union. If there is no deal in place following Brexit, the UK will be subject to EU tariffs and customs checks, as the country is considered a third-party. However, your business will also be free to trade with other countries where new trade deals may exist. Many businesses see this as a major opportunity, as their business is free to compete with a worldwide market.

The impact on your cash flow and supply chain

It is anticipated that as the country withdraws from the EU there will be an impact on supply chains, with many concerned about the time required for customs checks. However, it is hoped that the transition period will help to ease disruption for those which trade directly with the EU. Take a look at your supply chain and consider potential costs and dependencies, as you may find an opportunity to make savings.

It is likely that currency fluctuations following Brexit will impact your cash flow, so it can help to create a variety of potential cash flow forecasts. This will help your business identify any areas of vulnerability over the future months.

The impact on your customers

It is likely that currency fluctuations, customs checks and new tariffs will have an impact on the service or products that your business offers. This will have a knock-on effect on your customers, as these additional business costs are likely to pass through to customers.

Consider areas of your business where costs can be reduced, as this could reduce the need to raise your prices. There may be opportunities for your business following Brexit, as your UK products may be more attractive than EU imports.

The impact on your workforce

May businesses employ staff who are European Economic Area (EEA) nationals and there has been confusion over whether these employees will be able to continue residing in the UK. Regardless of the Brexit outcome, all EEA nationals should make an application via the EU Settlement Scheme. This will need to be completed before 30 June 2021 and will enable them to continue residing and working in the UK, with EEA nationals being offered settled or pre-settled status.

With many changes on the horizon it is important to have the finances in place to ensure a healthy level of working capital. If your business is looking for funding options, the team here at BusinessComparison can help. We can help you compare and arrange funding such as business credit cards, overdrafts, loans and invoice financing to smooth the impact of Brexit.