Brexit is constantly in the headlines. This has impacted the confidence of many small business owners. Unfortunately, these feelings of uneasiness will likely continue until the UK officially departs the EU, which happens at the end of March.
Adam Marshall, the Director General of the British Chambers of Commerce, believes there is a lack of bold moves being made in order to boost business within the UK. However, what can SMEs do? Is there anything they can actually do to secure their future?
According to Theresa May, the Brexit deal is nearly done, and when everything is fully agreed on, then business confidence might increase. Also, businesses in Britain are in a unique position because they can research various opportunities that may not have been available to them in the past, and this goes for both internationally and within the EU. Furthermore, businesses are on edge due to inflation and the uncertainty of everything. Ensure that you are up to date with the latest news and developments find out more about Brexit VAT refunds and how it could affect you.
Although there is clarity in a number of areas, there are still many aspects that remain unclear. The UK is due to exit the EU within a month and a half, and this is why SMEs need to take action now. With that said, below you will find a few tips to help steer your business through Brexit and going into the future.
1. Strengthen Relationships with Suppliers
It is the ideal time to strengthen relationships with your existing suppliers, while focusing on developing new ones. Trade agreements and political complexities will affect you directly. This is why you need to focus on maintaining an efficient supply chain. Remember, communication and transparency can go a long way.
There are going to be fluctuations due to Brexit, which is why it’s crucial to focus on building upon relationships that you currently have with suppliers. It’s also a good idea to have a contingency plan in place. Also, consider rerouting products because this can help you deal with the demands of border and customs.
2. Switch Out Volatility for Reliability
All you had to do was look at the currency market after the Brexit vote to see how volatile things got and will likely get. In fact, GBP exchange rates still fluctuate. This is probably going to continue for a bit.
The currency swings have impacted the way businesses manage export/import payments involving foreign currencies. Profitability can be affected big time even when there is only slight movement in the exchange rates. This means you should keep an eye on currency movements.
Furthermore, there are a number of transfer options out there. You should learn what those options are and how to minimise the impact when the markets move and can affect your bottom line. One way to do this is hedge your exposure.
Hedging should be done because it is a way to project against major movements in the currency exchange rates. Sure, you still are faced with some risk, but hedging does increase the chances of keeping things balanced, and you'll have more control over your exposure. For example, you can freeze an exchange rate for up to a year or two in advance, after forwarding a contract, and this should provide you with a cash flow that is more predictable.
3. Inspire Confidence in Employees
Uncertainty usually doesn't bring the best out in employees, but fearing for their jobs will only make workers be less productive. Do your best to be positive and inspire confidence in employees. Always communicate with your workers when there are important changes they should be aware of. Also, it will be a good time to review structural changes that might need to be made.
Offer your staff training opportunities and opportunities to grow, as these things will improve their confidence. Make sure you provide your workers with a management structure that is supportive. You might be surprised at how far this can go in regards to keeping the morale of employees high.
Those are only a few ways companies can prepare for Brexit. There are many other ways, but the above tips are a good place to start. By strengthening relationships and maintaining a confident workforce, then you'll be doing yourself, your employees and your company a huge favour.
