Deal or no deal, it’s hard to plan for Brexit when we don’t know what the outcome will be. However, there are ways for businesses to ensure they are in the best shape possible should things get difficult. Debbie Boulton, a director at Bath accountants Richardson Swift, looks at 10 ways to plan for Brexit.
Cost control. Look at your non-fixed costs and see where you could make potential savings. For example, you may want to consider trimming back non-essential costs or switching regular suppliers to get a better deal. This will give you more of a cash buffer should you need it.
Distribution channels. Be mindful of supply chain issues which could arise following Brexit. You may want to consider buying in excess raw materials/stock, or sourcing alternative suppliers in the UK, depending on the cost impact.
Credit control. Increase your cashflow by keeping your debtor days to a minimum. Always have agreed contracts and payment terms in place, and issue invoices at the earliest opportunity. Also, consider having an automated credit control system/App to chase debts, or save on time costs by outsourcing your credit control completely.
Planning and forecasting. Do a financial forecast for the year ahead to identify any issues there could be around cashflow, capital expenditure, or research and development. Ideally, you should have a forecast profit and loss account, balance sheet and cashflow (three-tier report) so you can see how the profit, assets/debt and cash will look across the coming year. Ensure you have expert support from your accounts team or accountant to help you do this.
Recruitment. Review your workforce and look at the impact that future immigration policies, particularly on EU workers, may have. Recruiting staff with the right qualifications and experience to fill skilled roles can be challenging. However, there are government-funded apprenticeships that businesses can take advantage of.
Business Plan. Have an up-to-date business plan in place and review it regularly. Look at the resources you’ll need, such as buying-in equipment or recruiting new staff. The most proactive businesses see Brexit as an opportunity, so ensure your plan explores the potentially positive aspects of Brexit as well.
New markets. If your business is dependent on EU trade, look at other markets which might make up for potential EU losses. For example, a weaker pound may make UK products and services more competitive internationally. Also ensure your products/services are attractive to any alternative markets you will be targeting.
Invest in technology. Consider ways in which you could increase automation within your business to drive efficiency savings and reduce your reliance on labour. Also keep the business on track with a Cloud accounting package, such as Xero. This technology uses real-time information so you can see precisely how your business is performing against the plan and act on any negative trends and emerging opportunities.
Finance. If you’re looking to invest, plan ahead. Access to bank finance is likely to remain challenging but there are lots of alternative options, such as invoice finance, asset finance or peer to peer lending. Decide which finance type is the most suitable and cost effective for what you’re investing in. Also, look at any existing debt to ensure you are getting the most competitive rates and debts are structured in the best way. It may be better to consolidate several loans, for example.
Be proactive. While the media portrays panic about Brexit, businesses are just getting on with things. Be well informed and willing to be flexible about future changes and exploit any opportunities there might be. Review your finances regularly and prepare to react quickly and make decisions when you need to.
