Brexit may seem a million miles away for a humble home-grown outfit, but commerce operates globally – and even the smallest outfit will tend to sell abroad via e-commerce. Even though nothing seems certain with Brexit, is there anything you can do now to start understanding how it could impact the way you do business? We’ve chatted to top small business advisers – and a small business owner – to gauge their views.
The business advisers
Bobby Lane, head of business development and outsourcing at Shelley Stock Hutter, says that you should mind your currency.
Lane saw the initial panic when the EU referendum result came in, but now he sees a more “roll your sleeves up” attitude prevailing. While the pound has weakened, this has made our products cheaper to sell abroad – and British products and services were already attractive at a premium price. A trade deal with the US could open us up to the biggest consumer market in the world. But the value of the pound is likely to be volatile, so Lane recommends managing currency hedging “very carefully”.
Carl Reader, director at accountants d&t believes that you should watch your workforce and keep communication lines open. Reader believes that certain businesses will struggle if the tap of EU talent is turned off. Our growing tech industry would be in trouble if it was unable to access European coders, for example. “But I don’t believe the government will cut access to good talent,” he says. However, less skilled roles are often filled by foreigners – and filling them with UK workers will require salaries to rise, he fears.
Another area to watch out for is communication. If your business engages with EU suppliers, the onus will be on you to keep on top of any changes that might affect that trade, such as customs and duties. “As this develops, it won’t always be front page news abroad – so other countries’ level of understanding will be lower than ours. Communication will be a challenge.”
Chris Barnard, accountancy technical manager at Crunch Accounting, forecasts that “changes to tax will undoubtedly occur, with VAT being a prime candidate since our VAT mechanism is currently linked to EU rules”, says Barnard. “Make sure you’ve got a proactive accountant who will tell you the moment new rules and regulations are announced.”
Developing on Reader’s theme, Barnard recommends keeping in touch with your technology providers, particularly if you use an e-commerce platform to undertake business abroad.
“Be sure to keep in regular touch with your chosen provider – they’re likely to know about any changes first and will be able to advise on any increase in costs.” If you’re using online tech to serve in Europe, why not consider expanding your horizons? “If you primarily serve European countries, it’s a good time to think about looking further afield. Trading with Europe might not get any more expensive, but it never hurts to diversify.”
The lawyer
Gary McIndoe, director at Latitude Law, argues it’s important to support and sponsor staff.
Employers should engage with their workforce now to determine whether Brexit will affect their EU employees personally, which might include supporting them through the application process for residence cards. “This can provide them with a greater sense of security – or allaying fears of any immediate changes to their employment,” says McIndoe.
As EU citizenship becomes less significant in assessing a person’s right to work, conducting full and thorough right-to-work checks will be increasingly important in order to avoid punishment in the event of illegal working. Talk to any employees who may be at risk if changes come into force, and find out how they plan to continue residing in the UK. Do they have settled status or is there another route they could take? “If you have a sponsor licence, this might be a way to keep a valued employee. If you don’t, this may be a route to consider for the future.”
The small business founder
Jack Jenkins, co-founder of University Cribs, believes you should be thinking hard and prepared to react.
Jenkins helped launch a student property search engine, University Cribs, in November 2016, which he describes as a “Rightmove or Zoopla for students”. There is a great concern that EU students will turn away from the UK. Jenkins’ business has to consider all possibilities, and be prepared to move as the market moves.
“Ultimately, what doesn’t come from Europe will, in time, be made up for from China and India and big developing countries.” University Cribs is “constantly” thinking about the future, with Brexit a key part of that thinking.
“It’s completely new, there’s no script for this … we need to be very careful about what we’re doing in our planning process, looking at markets, and analysing the knock-on effects. We listen, react and try to understand. Picking up snippets, news, listening to accountants, that’s the most important thing.”
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