Soon after the referendum a small cloud of uncertainty started to hover over the UK, as time has progressed the cloud of uncertainty has grown significantly.
The uncertainty has brought change, the change has been caused by the risks triggered by the uncertainty, but remember Brexit is all about change, it is the biggest transformation to UK business PLC and life, in more than a generation.
What it’s not, all the political noise and chaos within government and parliament, it is this that has caused the uncertainty to peak leaving both consumers and investors uncertain about whether to spend.
Naturally, this reluctance to spend has a dramatic effect on businesses, some more than others.
By realising it is purely change, then pragmatic business steps should be taken to reduce the impact from the uncertainty, naturally all change requires managing well in order to be successful.
In late 2018, the British Chamber of Commerce put out the results of their survey
Although somewhat shocking figures to some, it wasn’t to us.
Upon speaking to some business leaders, we have received various responses in why they hadn’t conducted any preparation or planning:
- “We have operated through recessions and just deal with it as it happens”.
Brexit is not like a recession, the changes it is bringing will affect all areas of our lives in one way or another and whilst it could result in a recession there’s a double reason to really consider what your business does and how it does it.
- “We haven’t got time to think about it”
- “We don’t know what it will mean and therefore do not worry about it”
In our opinion, these responses and attitudes are dangerous not only to the business but the livelihoods of the employees of those said businesses.
Remember: Brexit has far reaching consequences – for all businesses
Our Top Advice Points to consider for protecting your business
How prepared are your competitors? Have they put contingency plans in place or reconsidered their offering to reflect the changing economic scene?
Don’t forget! If your competitors have considered their options where will that leave you if you haven’t, and when your customers become concerned about their continued supply of product or service.
Cashflow is the most important necessity for any business, with increased product and resource costs or falling sales maintaining cashflow levels can be extremely challenging.
Ensure options are available to cover cashflow shortages, a point to note is that solely extending cashflow will only be a short-term relief if you have not considered and reduced the impact from the external factors of the uncertainty.
If sales are reduced or investment has stalled you will notice a fall in profits, this situation creates high risk for any business and can often be turned around, whether by 10% or 90% by reviewing your product or service offer and your customer demographic. Maintain concentration on your competitors and seek to obtain improved costs through your supply chain.
How will the outcome of our trade negotiations affect you? How is your knowledge updated and maintained on what you will need to do in terms of process and costs with the different outcomes including WTO terms? Training and maintaining knowledge or contracting a trade specialist will be invaluable in these current circumstances.
- Supply Chains
How prepared are your suppliers, where do your products or services originate? Both of these can have a profound effect on your ability to deliver dependent on the outcome of the current negotiations, the risk created by the uncertainty is causing some suppliers to question their supply to the UK market. Ensure you conduct a supplier assessment to identify how vulnerable you are to increased product costs or product availability.
As with most change comes opportunity. It takes research but can be very gratifying and rewarding, seek out opportunities either in your sector or look further afield if you would like a change or if you feel that opportunities are not present in your sector. In these current circumstances there is opportunity in home grown or local product or service and any sectors where the downturn is having a negative effect such as property and currency volatility.
- Business Strategy
Any business strategy written before mid-2016 is no longer worth the paper it was written on. Every business in stable times should have a strategy they are working to but in unprecedented times that we are facing now it has become critical to define and regularly review your business strategy. All business strategies must consider wider economic factors including risks and opportunities and regular review, whether quarterly or even monthly is recommended.