A framework to preparing your business for Brexit
Top tips on how businesses should plan for risks and opportunities before and after Brexit. Read our guide, which covers areas, including creating a business plan, operations and supply chain, product development, sales and marketing, as well as people and management.
There are only a few months to go until Britain leaves the EU. Yet despite this short timeframe, many businesses have not made plans or considered the potential implications of this departure.
According to recent ICAEW research, 31% of SMEs have not considered the impact of Brexit. Of those SMEs that have considered the impact, over half (59%) have not taken any actions to address their concerns.
There is still confusion around Brexit and what this will actually mean for UK businesses in the long term, both within the European trading landscape and beyond. It is important for companies to consider and plan for the eventual outcome, so they are in the strongest possible position to manage challenges and take advantage of the opportunities expected during and after Brexit.
Get Brexit ready
The ICAEW Brexit Top Tips series has been prepared as a guide for businesses, aimed at members working within businesses or advising businesses. It provides an approach for reviewing a company's business operations, supporting the planning and preparation that is critical for a business if it is to succeed in responding to the challenges of Brexit.
The approach focuses on six core areas that can help strengthen a business and increase resilience: a business plan review, operations and supply chain, product development, sales and marketing, people and management, Brexit strategy and financial planning.
The six topic areas
The guide provides a framework for businesses to deal with the impacts of Brexit, helping them to explore potential issues and understand the possible impacts on their forecast financial performance and cash requirements.
The clothing retailer Next serves as being a well-known company, who have recently gone through the process of creating their own Brexit strategy. This is detailed in their half yearly report, and considers how a no deal Brexit would result in additional costs and a slowdown in their supply chain due to delays at UK and EU ports.
Businesses should start the process by either reviewing their existing business plan, or taking the time to understand their critical success factors if they do not already have a plan in place.
This will create a context and direction for the individual or team managing the Brexit review process to partner with departmental heads and work towards minimising operational disruption. This person or team will be responsible for collecting and collating the impacts and risks following discussions with operational departments.
This will enable the business to: plan for supply chain disruption, continue its access to skilled staff and manage any increased compliance procedures. Management teams will be able to discover where the business may be vulnerable and to devise a contingency plan to protect and provide focus on operations.
Finally, these learnings will be brought together in an action plan in the business’s Brexit strategy and quantified to understand the potential financial impact, which can then be used as a basis to update forward looking forecasts.
A further review may be necessary when all actions and their financial implications are brought together and weighed against the physical or financial constraints of the company.
An ongoing approach
It is important that companies build on this strategy and constantly evaluate and sense check their plans as the terms of exit from the EU become clearer. As speculation around the prospect of the UK exiting without a deal on World Trade Organisation (WTO) terms increases, it is vital for businesses to consider a no deal outcome too.
As more clarity is reached during the countdown, each section of the ICAEW Brexit Top Tips will be updated with new information and calls to action for how to address the UK’s new trading relationship with the EU.