Brexit and your businessPublished on 29th January 2020 2020-01-29T13:49:14+00:00 - Last update on 13th March 2020 2020-03-13T22:40:30+00:00
After a referendum, three and a half years of politics, three prime ministers and two elections, plus plenty of angry words on all sides, the United Kingdom leaves the European Union this week, on January 31, 2020.
But what does it mean for you and your business?
At first, the answer might seem to be - not much. The UK will remain in the single market and the customs union until the end of the year under the transition period that was former prime minister Theresa May’s main legacy.
But, in fact, there could be some big changes coming - and whether they are positive or negative can depend on what you do now - and whether you have the business funding you need.
During the transition period, the UK will continue to observe EU rules and pay into the EU's budget. To all intents and purposes, we remain, in effect, an EU member until January 2021. If you trade with the EU today, you can carry on doing so on Saturday with nothing changed. You will also be able to continue to do so until the end of the year, at the very least - and there is some speculation that the transition period will be extended.
You can still travel freely to Europe, employ EU workers, sell to customers within the EU and work with EU suppliers, and there will be no change in any of the rules, paperwork or tariffs involved.
It definitely will look like business as usual - at least on the surface. However, things are likely to change. The negotiations have only just begun, and hammering out a trade deal is likely to take months. What's more, we still don’t know just what form that deal will eventually take. It could be that free trade will continue - but the fact is that tariffs could be imposed, which could potentially have a major impact on your business.
But the changes may not stop there
The UK is now outside the EU, technically at least. This means that the UK government is now free to negotiate trade deals with other countries, which was impossible as an EU member. Some minor agreements may already have been made behind the scenes, but key to the government’s current plans may be a major trade agreement with the US. A deal with the world’s largest (or at least, one of the world’s largest) economies could be key to progress, and a favourable agreement could see the rest of the world following the example.
In an ideal world, leaving the EU could mean a positive deal with the countries that make up Europe and favourable agreements with the rest of the world. More agreements and more markets could mean more profitable customers for you, whatever line of business you are in.
Even if you are not an exporter or importer, a new range of markets for UK businesses could stimulate the economy, leaving your customers or clients with more money to spend.
What does this all mean to you?
It is hard to make predictions about anything to do with Brexit. Things seem to go in very unexpected directions. For example, when the value of sterling dived on international markets following the Brexit referendum in 2016, national pride might have suffered, but UK manufactured goods, from whiskey and biscuits to computer components and aircraft engines, were suddenly very much more competitive in practically every export market in the world.
Leaving the EU could mean a boom for British business. But whether it is a post-Brexit Boom or a post-Brexit fizzle, there could be some precautions that you need to take now to ensure that you can remain competitive.
Look at your suppliers
If no deal can be arranged, it would leave manufacturers facing tariffs on the import of goods from EU suppliers. Just-in-time logistics would become problematic. You may need to start looking around for new supplier outside the EU, and this could mean setting up new import deals and increasing your inventory. At Rangewell we can help you find the inventory and international finance funding you need to set up a new supply chain.
Look at your staff
Freedom of movement may be preserved under the negotiations but, in many sectors, skilled people and labourers may be in short supply if workers decide to return home. Bringing in new machinery and making more use of IT and even AI may become essential. If the number of European workers shrinks ahead of Brexit, as a manufacturer you may need to invest in automation and robotics as human workers become more scarce and more costly. At Rangwell we can help you find the Asset Finance solutions you need to bring in new equipment, from a single machine to a fully automated production line.
Look at your systems
When you are dealing with other countries in the EU, there are no issues with ‘Rules of Origin’ provisions. That could change if the rules change under a new trade agreement. Customs authorities use the World Trade Organisation (WTO) Rules of Origin criteria to determine the economic nationality of particular products - and knowing the precise origin of any product is essential to ensure the correct rate of duty or tariff can be applied
Post-Brexit, as a UK exporter you will have to declare the origin of your products. You may need to introduce new procedures to deliver full traceability. At Rangwell we can help you find the funding you need to invest in IT systems - both the hardware and the software - that you need.
Look at your customers
In the worst-case scenario you could find that you were unable to do business with the European customers you supply now. In a perfect Brexit solution, you would retain those customers - and be open to working with new customers from around the world under new beneficial trade agreements. Whichever happens, you may want to find new customers and new markets around the globe. At Rangwell we can help you find the funding you need to invest in marketing, whether you need conventional advertising in trade magazines or a refreshed web presence.
Look at your cashflow
If you suddenly start working with a host of new customers on the other side of the word, you may find that your business takes a serious cashflow hit before the profits start making themselves felt. The cost of acquiring new customers or clients and the costs and delays of international shipping could mean that your cash is depleted as you wait for payment. Preserving positive cashflow means preserving your business. At Rangwell we can help you find cashflow support solutions - like International Export Finance and Invoice Finance which will help you deal with the challenges of international trade - and of rapid growth.
Making Brexit a business opportunity
At Rangewell, we can help businesses across all sectors find the funding they need. We see Brexit as an exciting opportunity, and we are ready to go to work to help you make your business financially ready for a post-Brexit world.
To find out what those solutions could mean to you, simply call a Rangewell Brexit Finance Specialist on 020 3318 2613.
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