There’s no doubt that businesses in supply chains and those managing supply chains are in an uncertain position as a result of the EU referendum.
Companies whose lifeblood involves trading with customers and suppliers within the EU, face the prospect of significant, but as yet uncertain, changes to cross-border trading relationships.
This may leave some businesses feeling powerless and unable to plan for their future. However, in this period of relative calm before Article 50 is invoked and a potentially frantic two-year negotiating period begins, there are some practical and positive steps businesses can be taking to ensure they’re in a strong position to capitalise on the market post-Brexit.
A Brexit audit is one way that organisations can assess all areas of their business and how it may be impacted. This audit can cover a number of areas:
Your business’ access to market post-Brexit
There’s a possibility that as a result of Britain leaving the EU, tariffs will be placed on imports and exports. Obviously, businesses are worried about this possibility and the added cost, as well as the increased administrative burden. Clearly understanding the relationships that could be impacted is critical. Although the current climate of uncertainty can make it difficult to make long-term plans, companies whose business and supply chains are likely to be impacted by Brexit are in a unique position to seek to influence the government’s approach to future trading arrangements with Europe. Ensuring that as a business your voice is heard and you lobby for the best new agreement for you is essential.
Manage currency risk
The exchange rate has deteriorated significantly – some news reports have even put the crypto-currency Bitcoin as a safer bet than the pound – and businesses need to be managing this risk. A Brexit audit should assess the long-term impact of a weak pound and how processes should be managed to ensure this potential instability doesn’t adversely impact operations.
Try to minimise skills shortages
Assessing the number of EU nationals employed is essential – some businesses will rely on a high number of workers from the EU. Again, while this outlook is unclear, employers can advise those who have been in the UK for five years or more to apply for residency. While this won’t help everyone, it should reassure some and provide more certainty for the business.
The Brexit outlook may be unclear, especially in relation to supply chains, but it is important companies ensure their voice is heard at the negotiating table – this kind of opportunity may not present itself again any time in the near future.
☛ Matthew Sutton is a partner at law firm Shakespeare Martineau