Brexit: So what do we do now?
Brexit preparation while sailing unchartered political waters
The view from Bruce Potter, Chairman of Blake Morgan.
Amidst the sound and fury of a full scale leadership challenge inside the Conservative Party (let alone the postponed parliamentary vote and possible no confidence votes) what can a business do to prepare for any permutation of deal / no deal / transition /no transition / suspension of Article 50 / WTO or any combination of any of them?
A calmer view says that we do now have a significant and weighty withdrawal agreement with lots of transitional detail and an accompanying political declaration. Yes those documents are not approved by Parliament, and could be rejected in whole or part so what can you do?
While the temptation is to keep saying "Keep Calm and Carry On " time is marching on and with Brexit potentially less than four months away and even HMRC now acknowledging a no deal is possible, the new slogan should probably be "Keep Calm and start preparing for a No Deal".
Practically the risk assessment of a no deal will differ from business to business but a simple starting point is to test your business in three key business domains.
- Supplies, Suppliers and Production; can your immediate supply chain survive temporary or medium term disruption? Can you mitigate those risks e.g. by setting up alternate supply arrangements or stockpiling key supply components? Do you/ must you /should you alert key customers you are taking those steps? If there are lead times for new suppliers to start replacement contracts they need to be mapped and possibly finance arranged to help fund extra stock levels (see below). Should you review production levels if there is going to be even temporary disruption, what are the key dates for management to review production in the first half of 2019?
- Employees and other key staff resources; colleagues from the Employment and Immigration team at Blake Morgan have just updated their views on this area, but our earlier advice to understand which staff could be affected, to reassure them, and help them clarify their status remains a priority. As our article makes clear, times to sort out status may be much shorter than under an orderly Brexit. Practically in a full employment workforce there may also be the need to offer extra financial incentives for anxious employees to stay with you. In the short to medium term they will be very difficult to replace.
- Financial Resources; do you have the available cash or borrowing facilities to support your business through a temporary disruption to normal trade? We saw earlier this year (seems a long time ago now ! ) that even a few days of adverse winter weather can disrupt business seriously, so how would you mitigate a few weeks or months of disrupted sales and production? Such financial support may well be forthcoming but is more likely to be available (and adequate) if you have well developed realistic contingency plans for managing all the risks mentioned above, and for a recovery programme from those shocks.
Our Brexit guide outlines some of the key areas that you may wish to consider and take action on now to take advantage of the autonomy that the UK will have when Brexit is finally settled. If you have questions on what Brexit means for your business, email firstname.lastname@example.org and ask our expert legal advisors.
Download our latest Brexit advice
View a video of the chairman, Bruce Potter's latest advice.