But there are some steps which can be taken now to ensure your firm is in a strong position to capitalise on the future. There has also been a feeling amongst some SMEs that, for those businesses which don’t import or export, Britain leaving the EU won’t have too much of an impact. This is also wrong, and a risky position to take.
Negotiated trade agreements affect all UK businesses, not just large multinationals, because today all supply chains cross borders and involve a complex matrix of imports and exports, however small or domestic a business. Indeed, it’s the smaller businesses that will be the least resilient to the increased administrative burden created by Brexit, for example, if they have to start showing customs authorities “proof of origin” for all their goods or components if we leave the free market.
It’s advisable for SMEs, no matter where they are in the supply chain, to run a Brexit audit. This will establish exactly what the potential issues are and then it is important to start putting procedures in place to manage those identified issues.
The Brexit audit should cover:
Reviewing terms and conditions
Are they fit for purpose in the changed post-Brexit-vote world? There has been talk of Brexit clauses being pushed through for commercial contracts and it is important that businesses entering into new agreements with suppliers, for example, do their due diligence and ensure that the contracts are watertight. In times of economic instability and uncertainty, businesses can be left in a position where they have to scour contracts for a way out. Doing this work beforehand can ensure contracts are solid.
Checking your financing
It is important to renegotiate terms now with banks while they are still pushing the message they are open for business and willing to lend. This may change. For example, check the expiration dates on any fixed term loans. Even if they don’t expire for another year it may well be wise to think about discussing terms now.
Managing impacts on your workforce
For smaller businesses which rely on EU nationals, Brexit spells a long period of uncertainty for both employer and employee. Although it is difficult to offer complete reassurance, by opening a dialogue now it will help workers know what they’re facing. Employers can also recommend that those who have been in the UK for five years should consider applying for residency. It will help provide some certainty in these uncertain times.
Rethinking your usual litigation tactics
While not applicable for all businesses, it might be worth thinking how you run any litigation you are currently involved in and speaking to your lawyers about changing tactics. For example, choosing when to issue proceedings, perhaps to flush out facts in the discovery process that might help mediation. In a business market completely disrupted by Brexit, this game will change and businesses need to understand the new dynamic and be prepared to adapt tactics.
Taking these sorts of practical steps should help ensure businesses are feeling more confident and in a better position to weather the Brexit storm. This change is seismic and will have long-reaching implications – it is important all businesses assess the impact Brexit will have and prepare for it.
Matthew Sutton is partner at Shakespeare Martineau.
As we now move past a month since the historic Brexit referendum vote, entrepreneur Richard Upshall argues that trading opportunities are abundant – and even goes as far as suggesting Donald Trump becoming president would be a boon for the UK.
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