If you are concerned about the impact of Brexit on your business, here are some matters to think about to put your business in the strongest possible position during the months of uncertainty that lie ahead.
The old adage ‘cash is king’ has never been more true. It is important to monitor your incomings and outgoings and make provisions to ensure you can weather the storm if it seems there is likely to be a financial shortfall. The effect of the UK losing its AAA credit rating may mean increased restrictions on lending, particularly from the mainstream banks. However, recent research has shown that since the EU Referendum more SMEs have been seeking funding through a variety of channels.
All UK businesses currently benefit from the EU’s Late Payment Directive, which plays a key part in ensuring certain customers pay on time, helping with day-to-day cash flow. Now is the time to be putting in place robust credit control processes and procedures to minimise the risk of bad debt and keep your bank balance in the black.
Over reliance on one customer or supplier
If you are over-reliant on one supplier or customer, particularly if they are EU based, then you may find yourself in a weakened position should they decide to part ways with you as a result of any trade barriers or the lifting of free trade agreements. Take the time now to look at contract terms. Can a better deal be struck? Is it possible to swap to non-EU suppliers? Are there steps you can take to try and diversify your customer base?
If you employ a significant number of EU workers, or have non-UK nationals in key positions, then, depending on the outcome of negotiations, Brexit may have a significant impact on your recruitment strategy and talent pipeline. In light of the fact that the government has not given a firm guarantee on the status of EU nationals living in the UK, it is to be expected that some individuals will review their circumstances and take action ahead of any formal agreements. Can your business cope and how can you secure or develop the talent you need, are the questions to be addressing now.
The immediate impact of this historic decision will be limited, with the full implications becoming clear in the fullness of time as the formal process to leave the EU progresses. In the meantime, it is important for SMEs to take action in a number of areas to ensure they well-placed to navigate the uncertain economic waters ahead.