How to protect your business from going bust because of Brexit
No one knows what’s happening. No one understands Brexit anyway. But there are ways to protect your business from the negative impact of Brexit.
And by now, we’re all bored of trying to work out what’s going on with votes in Parliament, Teresa May, Corbyn and all of the rest of them. It’s like an unfunny comedy show that has been running for years. Except that Brexit is also scary because we don’t know what the impact will be.
Whether you think Brexit is a good idea and you can’t wait for it to get going, or you are marching for a People’s Vote to try to stop it altogether, you still have your business to think about. 41 per cent of UK businesses have done zero planning or preparation for Brexit. Probably because we don’t know what form it might take, or what we should do to prepare our companies if it does happen.
You can’t do anything to change what’s happening in the news. So, let’s stop watching that comedy show, and try out some of these ideas to protect your business from the negative impacts of Brexit.
Here we go…
What you can do
Let’s look at some of the potential negative impact of Brexit to your business so you can start protecting your business now.
The most obvious one is that there’s a slow down in the UK economy. That’s already happening – we’re looking at 0.18% growth just now, with 1.9% inflation.
Yeah, yeah, boring figures. What does that really mean for my business?
In practice, this means that your customers are likely to be spending less money. What I’m seeing is that my clients who sell to big companies are having to wait for longer for decisions from their clients. And clients who are selling to consumers are having to work harder to get the same level of sales.
No one knows whether Brexit might cause a recession, but we want you to be prepared for this either way. In the 2007 recession, the businesses who did well were the ones who had some cash in the bank and were able to quickly change the way they did business.
Brexit proof your business tip 1
Build up some cash in your business account now. This will mean that you can wait out any storm because you can still pay the bills, even if the number of clients or projects slows down. This will help protect your business from the negative impact of Brexit.
And, the businesses which did well in the last recession were the ones which were able to invest because they had some cash behind them. They were in great shape once the economy started moving again, and had a head start on their growth plans.
Tip 2 – Get some different customers
If you currently only sell in the UK, think about getting some new customers from overseas. It might be that the UK economy goes the way of Greece or Spain, healthy economies which ground to a halt in only a few months. The companies which survived there are the ones who were selling internationally, so their customers were in stronger economies, while their costs at home were kept low.
We don’t want you to be at risk if the UK economy goes wobbly.
Can you start selling to the other English speaking countries in the world? Maybe it’s time to start thinking about offering your services in the US and Canada. I’ve just started working with one company in India, and another in Hong Kong, and I’m going to push for more of this to Brexit proof short term investment plans of Business.
If thinking about how to protect your business from the impacts of Brexit gets you started on selling more abroad, this might well be good for your business anyway. Creating more opportunities for some exciting new customers is a good thing, no matter what happens with Brexit.
Ironically, some of the strongest economies and the ones which will still be easiest to export to are in the EU. Don’t write these countries off. It might become more challenging to export to the EU if Brexit goes ahead, and maybe you’ll to pay tariffs to sell your goods and services there, but it won’t be impossible.
Which brings us on to tip number 3…
Some practical tricks to have up your sleeve
Some of the discussion about what post-Brexit Britain would look like has looked at potential bottlenecks at UK ports as lorries full of exports try to clear a new customs process if we go out of the single market. Or going through the non-EU passport control section into France, rather than just whooshing through on the Eurostar.
I have no idea if this is going to happen, but maybe you can move away from the world of physical products and escape all of this. And cut your costs and sell more at the same time.
If you sell services, you don’t need to be physically present for those client meetings. I changed the way I work and became a 90% online business advisor a couple of years ago. Which means I can sell my business coaching and programmes overseas, to Hong Kong, India and Slovenia with just a bit of thinking about time zones. It’s made my business much more efficient, and clients seem to like it too. And that definitely means I have some protection from the negative impacts of Brexit.
Some goods are always going to need to be moved about physically. If you make artisan jam, your customer in Slovenia is not going to be interested in a digital version. But, maybe you can avoid the lorry queues post-Brexit even if what you sell has to be physical.
Wendy Ward has done this successfully with her sewing patterns. She now sells globally and gives her customers a choice of a pdf pattern they can download, or a paper pattern. The pdfs automatically do well for her in the US and Europe.
Maybe you can make a digital version of your product like Wendy, and increase sales while expanding into new markets. And reducing the need to hold stock or supplies.
Or can you licence your design for someone else to sell it into their home market? If you make specialist motor parts, pens or cleaning products, can you get someone else to do all the hard work of selling them in another country, based on your specification?
Setting up a joint venture based on licencing your intellectual property rather than the goods themselves could be a very lucrative way forward for your business.
And while you’re going virtual…
UK businesses are already finding it difficult to find staff because there are less EU citizens here to choose from when recruiting. And some companies now have people leaving because they are uncertain of their future in the UK. Given that it’s already challenging to find high-quality staff, this trend is going to make life a lot more complicated.
So why not make your company virtual and be able to choose applicants from anywhere in the world, so you can be sure of getting the best quality candidates? Maybe you can start with some of your existing staff and set up systems so they can work from home and get more done, so it’s all ready for your next appointment.
The other business benefits from this are potentially huge. You don’t need to pay for office space for all your staff, people are more productive when they’re not crowded into an office full of other people interrupting them, and you’ll get some peace and quiet to get things done. Plus staff love this trust, freedom and flexibility. And maybe you could attract some great people who don’t need to be paid Brighton or London rates.
There are legal rules about how you can and can’t have people working for you from abroad, so do get specialist advice on contracting workers correctly.
Why not move your company to the EU?
This is what hundreds of companies are already doing. They’re either setting up sister companies in other EU locations or moving the whole thing to Paris or Amsterdam. This might be worth thinking about if you’re serious about the need to protect your business from the negative impact of Brexit.
The Financial Times reports that Amsterdam will soon be the leading English speaking capital of the EU. And one of my clients who is moving to Amsterdam to be with her partner (nothing to do with Brexit) reports that the city is full of UK companies who have relocated there in the last 18 months.
By the way, if you’re going to do this, I’d probably avoid Amsterdam as it’s nearly as expensive as London. Other European cities are available.
How I can help
This article has come from my experience of helping ambitious owners of small businesses to make their companies more successful. And it’s based on 18 years of experience of doing just this.
If you’d like help with moving into new countries or new markets, making your company into a virtual organisation, or generally protecting your business from the negative impact of Brexit, we should have a (virtual) coffee and chat. Here’s how to make that happen.
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