Brexit Proofing Your Business
The uncertainty around Brexit continues unabated. Neither pro-Brexit or pro-Europeans know exactly what will happen come midnight on 29th March 2019.
Some of those who import and export through the EU or in the Far East are taking measures to ensure they have stock available, should a No Deal / Hard Brexit hit on the 29th. Angling Direct for example are restructuring their business in preparation - Read More at Retail Gazette.
DOES IT MATTER?
For some, whether the UK crashes out of Europe without a deal (No Deal) or comes to some sort of agreement (Theresa May's current plan / N.Ireland Backstop etc.) is academic and of no real concern.
However, there is a great deal to be concerned about with either option. By voting to leave the EU and various additional EU markets, the UK government now has to step in and provide guidance on import/export tariffs and regulations.
Some say the UK will simply fall back to WTO (World Trade Organisation) rules but many believe that a) this doesn't automatically happen and b) WTO rules are a fall back option for a reason, i.e. they're pretty poor and inflexible. Hence why countries and economic blocs go ahead and organise their own trade deals, away from the WTO guidelines.
The UK now has to choose whether it follows WTO, aligns itself with the EU or creates completely independent tariffs and regulations on all aspects.
The deadline of the 29th March is only the start of the divorce process but it's critical for you to have a plan in place for shielding your business from the negative impacts of the entire process, whether we have a deal in place or not.
TALK TO YOUR SUPPLIERS
Your first step is to talk to your suppliers. Ask them if they have any plans in place and if they're sufficiently stocked to see out a few more months of uncertainty at the borders.
At Humber Distribution, we are pretty flexible with the whole Brexit situation. We design and manufacture our own products, with delays only expected on some raw materials that are imported. For example, our clock mechanisms are sourced from overseas suppliers but we have made contingency plans and we are sufficiently stocked for the next 6 months.
The rest of our product range utilises raw materials from the surround Yorkshire region and we don't foresee encountering any significant issues with a No Deal Brexit.
PLAN FOR NO DEAL
It's always best to make provisions for the worst situation. If possible, review your previous 12 months of sales and stock buying, then see if you have the available finance in place to stockpile some of your best selling product lines for a little longer than usual.
Also, seek out alternative back-up suppliers where possible. This way, if one of your suppliers starts to struggle with sourcing products, you can easily check in with another supplier straight away and ask if they have your top selling lines in stock.
WE'RE ALL IN THE SAME BOAT
Don't panic. Every business is in the same situation and uncertainty is the biggest problem facing UK business at the moment. The uncertainty will grow as we head toward the 29th March deadline but soon after this, things will begin to settle and fall in to place, as we know what type of deals have been agreed and what our path is going forward in to 2020.
Remember to keep up to date with other business, join a local Networking Group or join the discussion on various business forums online. Twitter is also a great source of up to date information and you can follow us @humber_dist as we share more important information relating to SMEs in the UK.