Are you aware of the potential changes that Brexit will have on your business? Find out what you should be doing for your business to plan for the potential tariff charges and supply lead times by reading the article below.
You can download our handy guide to the impact of Brexit on your business here – JDA- Active Practice 2019-03 – Preparing businesses for leaving the EU
Alternatively, read about it below…
Why does my business need to be prepared?
You should know that in the near future (date TBC) the UK is scheduled to leave the EU. If you are a business owner, then this will bring big changes for your business.
If your business relies on the EU for buying or selling, then there are plans in place that will adjust the pressure.
A survey from British Chambers of Commerce (BCC) suggests that a significant number of businesses are not acting as they are waiting for a no-deal Brexit.
There is a lot of uncertainty, but you should ensure that you are one step ahead by getting as ready as you can be, as this can being prepared for the changes for your business that may happen as a result of Brexit can pay dividends in the future.
What will it mean for my business if trade rules change?
If your business relies on goods moving between the UK and EU then if a no deal Brexit occurs trade automatically go back to World Trade Organisation (WTO) rules.
This will result in:
• Goods will have to be checked by customs
• Tariffs will be charged for goods getting imported or exported from the EU
• Increasing costs for businesses
• Slow processing times on the borders
You should note that the impact of the tariffs will vary between industries. It is expected that farmers will be affected the most by the tariff charges.
What can I do to minimise the impact for my business?
You can minimise the impact of Brexit on your business by planning ahead with your supply chain if you rely on EU imports. The predicted changes that Brexit will cause will create longer delays at borders and reduced capacity at UK ports.
If your business operates using a just-in-time stock system, then you need to plan to minimise the disruption to your supply chain.
You could look into switching to a UK supplier, as this will reduce the impact of any delays.
Another option is that you could plan to order a greater amount of stock from the EU suppliers for products that you know will be in demand. However, this is risky as demand can change.
What will be the effects of Currency Fluctuations?
You may want to look into sourcing from within the UK if you are not already doing so, as this will protect your profitability and will prevent any increases from currency fluctuations as a result of Brexit.
If sourcing from the UK is not an option for your business, then you should strengthen your relationship with your existing suppliers and try to negotiate better trading terms.
We can help you develop a currency strategy so that we can help you plan to in advance and budget for international payments.
You should also be aware that if you decide to pay your suppliers by their local currency, you may be able to get favourable exchange rates for a future date.
Why is it important that I know my target market?
You should be aware that although the EU will remain a trading partner for the UK, it is worthwhile to refocus your marketing strategy to both the UK and EU markets to increase sales and reduce the effects of a no-deal Brexit.
If your business has not set-up an online website, then this should be top of your list of things to take advantage of. The UK is the third largest e-commerce market because of online retailers such as Amazon, which have access to international markets.
It is worth developing your marketing strategy for international markets, as there are opportunities for British brands to take advantage of markets in china, US, Australia and Canada.
You should make sure that you plan for whatever the outcome of the Brexit deal is, so that you and your business are prepared for any changes that may be introduced such as tariff charges and increased processing lead times on the borders.
To learn more, download our guide here – JDA- Active Practice 2019-03 – Preparing businesses for leaving the EU
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