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Tuesday, October 20, 2020

With 80 Days To Brexit, The Three Questions To Get Your Business Ready

This year, we have all been distracted by the overwhelming challenge of COVID-19, and rightly so. Widespread disruptions, dramatically changed customer behaviour and government restrictions have hit all areas of business since the start of 2020. The pandemic has reduced companies’ cash flow and bandwidth, leaving businesses extremely vulnerable to further disruptions. With what has already been a tumultuous year, there is another serious challenge looming; Brexit. 

While preoccupied with the pandemic many businesses have seemingly forgotten about the massive effect Britain leaving the EU will have. Others are kicking the can down the road, intentionally ignoring it until the drastic change is upon them. On September 24th, The British Chamber of Commerce said that only 52% of UK firms that trade internationally had carried out a risk assessment ahead of the end of the Brexit transition period on 1 January 2021. 

With less than 80 days until the end of this transition period, businesses should be doing all they can to ensure they are ready for every eventuality that Brexit might bring. By asking the following questions of their business, leaders will be able to piece together a clearer picture of how they will be affected, and the plans they need to put in place now. 

How will our workforce be affected?

The free movement of people between the UK and the EU will end in 2021. For any businesses here in the UK with EU citizen employees, a significant part of your workforce might not be able to stay working with you, unless they become a UK citizen or apply to the EU Settlement Scheme. Similarly for UK nationals living in Europe, even if working for a British company, new requirements will have to be met, specific to each country, which could include applying for residency, acquiring new paperwork or having a particular job. 

Like all things at the moment, these applications take time, so should be applied for immediately to avoid massive disruptions and a needless reduction in your workforce come January. The very first step should be to ask your employees what their plans are and how best you can support them. Among the bigger issues, driving licences, health insurance and passports are all likely to change, and clear communication from their employer will help them reach tough decisions. 

How will my supply chain be affected?

One of the main headline effects of Brexit is the massive disruption it will cause to supply chains. The sudden halt of the free flow of goods between the UK and Europe is sure to cause widespread delays, which will have a knock-on effect to all areas of business. Recent British government communications to the haulage industry warned of queues of up to 7,000 trucks in Kent and two-day delays for cargo travelling to and from the EU via the main southern England routes. The communications come at a time where the government is avoiding blame for any future delays, instead pointing fingers at industry heads and EU countries. 

No matter who you believe is at fault, supply chain disruptions are inevitable. From restaurants with European-sourced ingredients to technology manufacturers, it is worth considering how to diversify and secure your supply chain. Alternative logistics routes or even different sources should be considered. Now is the time to double-check the new documentation your imported and exported goods will require and having contingency plans in place to remain operational when facing delays. 

What does our five year plan look like? 

Your five to ten year business plan will have certainly been thrown into disarray by the global pandemic, but if this year has proven anything, it is that flexibility is a key element in any strategy, as it’s nigh impossible to predict even the short term changes and challenges coming our way. 

This doesn’t mean throwing your growth plans out the window. It means reassessing their feasibility, working in alternative ways to achieve your goals while building in plenty of contingency plans. And while it might seem like an uphill fight, there are positive opportunities to be had. Just as the pandemic pushed companies to move forward their digital strategy plans, the pressures of Brexit may provide the chance to push ahead with some of the strategies that were due to take place over a longer time frame. 

The key to this next phase of planning is flagging the certainties as well as all the possible unknowns. For instance, we know on January 1st, Britain will leave the European Union. But we can’t be sure of the trade deal we will end up with. And we can’t forget that it’s quite possible we’ll be in the middle of a second wave of the virus. By acknowledging and planning for all the possible outcomes now, you can have branched contingency planning that allows your business to remain flexible. It means you can have well thought out plans rather than reacting to the change, by which point it’s far too late. 

The end of 2020 is set to be an extremely difficult time for businesses. The UK is set to be hit by the triple threat of receding government support schemes, a resurgence in the Coronavirus and an uncertain end to the Brexit transition period. By asking the right questions now, businesses can focus on what they can control and prepare contingency plans for the variety of challenges 2021 is sure to bring.

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