All the talk about deal, no deal and the possibility of a people’s vote has given Brexit something of an academic air. But while the popular press is happy to continue selling newspapers on the basis of these details, the reality is that Brexit, in whatever form it takes, is creeping ever closer. Many small businesses are finding themselves in the position of rabbits caught in the headlights, with little notion of how Brexit is likely to affect them and even less idea of what they can do about it.
Around 43 percent of British trade takes place between the UK and the EU, bringing in export revenue of about £235 billion every year. Given that 40 percent of the UK’s SMEs are planning on increasing their international sales in 2019, there’s no doubt that the EU is going to remain a vital trading partner for a vast number of small businesses in the UK, regardless of how the final Brexit negotiations pan out. But with so many uncertainties, how can small businesses best prepare for life after Brexit?
Supply chain management
From the moment the referendum results were published, the majority of UK businesses with EU suppliers started to see the effects of a plummeting pound. Where possible, exploring UK suppliers instead will negate the currency exposure as well as guarding against potential disruption and delays at UK ports.
Of course, this is not always going to be possible. If EU suppliers are the only option, now is the time to tighten up on raw material inventory management to be certain the business has what it needs to continue normal operations. This is also an ideal moment to firm up your own trade deals with key suppliers, regardless of what is going on in Whitehall. For example, offering to use a global currency account to pay in Euros can work out best for everyone and negate exposure to volatility.
In the event of a no-deal Brexit, the short term consequences might well be chaotic. However, planning ahead for any potential logistical difficulties will minimise the impact.
Consider every market
The EU’s importance as a trading partner is understood, but it is not the only market in the world. 2019 could be the perfect time to focus on alternatives, both closer to home and further afield.
Take a critical look at your sales, marketing and pricing policies within the UK. Boosting sales in the home market could be just the thing to act as a buffer against any dips or problems that affect EU trade in the months after Brexit.
There is also a wealth of opportunity beyond the EU. China is eager to foster new business relations with the west, particularly given its current trade disputes with America. Also, there has been an upsurge in exports to Canada over recent years thanks to the nation’s seemingly unstoppable obsession with “Brand Britain.”
Brexit is likely to cause disruption to the UK’s businesses, and leaving the EU might bring with it certain costs. But there are also opportunities for those willing to seek them out.