How to prepare your small business for Brexit

How to prepare your small business for Brexit

Running a small business can be unpredictable at the best of times. No matter how well we plan, there are always going to be curveballs to deal with –– and never has this been more apparent than right now.

We have new finance bills coming out, we have the impending introduction of the Making Tax Digital initiative and, of course, we have Brexit.

As we are still in the early days of Brexit negotiations, it is nigh on impossible to make any concrete predictions. It is safe to assume, though, that leaving the EU and the single market is going to have a monumental impact on businesses, with small businesses predicted to bear the brunt of the disruption.

Despite this, reports indicate that less than one third of British businesses have made formal Brexit plans.

Some business owners are quietly confident that the press is overstating the problem. They are pretty sure that Britain will be able to negotiate a favourable deal and it will all be business as usual. Some have opted for the ostrich approach, heads firmly in the sand. If we can’t see it, it’s not really happening!

Others are worried. They know that whatever the outcome of the negotiations, there will be a period of disruption and change. They know that they should be preparing their small business for leaving the EU, but they are overwhelmed, and unsure where to start.

If that sounds familiar, we’ve got good news and bad news. The bad news? You’re right — you should start Brexit preparations now. However, you do not need to worry unduly, since creating a Brexit strategy is not as hard as you imagine.

 

Three things to consider when creating a Brexit plan:

 

How will leaving the single market affect your business?

Britain’s place in the European Single Market, at the moment, grants businesses four main freedoms. We have the free movement of goods, the free movement of services, the free movement of capital and finally, the free movement of labour.

Prime Minister Theresa May, has confirmed that she will seek to leave the single market, stating her intention to strike a deal that will still allow free trade of goods and services while restricting immigration. However, it is still early days and we don’t yet know if Brussels will agree to such a deal.

It is certainly worth considering, then, if any aspect of your business currently relies on any of these four freedoms — free movement of goods, services, capital or labour — afforded by our membership of the single market.

 

Don’t feel like you have to start from scratch.

You don’t need a completely new business plan. If you are going to be affected by changes to any one of these areas, treat it like any other business challenge and strategise ways to overcome it.

For example, if your business has a high volume of international money transfers, consider using a broker. This will give you the option to fix your rates for a set period. This could save you a considerable amount of money and will bring relative financial stability, which will reassure your clients and investors.

Do you rely heavily on trade from the EU? Now is the time to explore other options. How feasible would it be to investigate other international markets?

If you are worried about the financial impact of rising import costs or the price of raw materials, try to keep a closer eye on your budget. Can you find ways of making savings that will not affect the quality of your goods or services? For example, you could shop around to make sure you are getting the best deal from energy suppliers and business insurance providers.

Or, if your current workforce is made up primarily of employees from the EU, start your research now. If you can, take steps to ensure your employees will still be legally allowed to work for you post-Brexit.

 

Your accountant can help.

Many people aren’t aware that accountants can also help with business planning. So, if you do feel overwhelmed by the whole Brexit thing, it is definitely worth talking it over with an accountant.

You might be surprised at just how much reassurance they can give you — not to mention great ideas for navigating through the potentially choppy financial waters of post-Brexit Britain.

 

For more information on the ins-and-outs of running a small business, including information on Making Tax Digital, check out our archives.

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