With new Prime Minister Boris Johnson determined to take Britain out of the EU, with or without a deal, on October 31st, how can UK businesses prepare for life post-Brexit if the latter becomes reality?
The political debate is currently not about what is best for the UK, but the mechanics of how, and some would say if, the result of the 2016 Referendum is implemented.
Of course, not all businesses will be affected or at least seriously affected. The reality, as opposed to political and media hot air, is that many businesses, such as my old hospitality businesses, will only be marginally affected. We’ve already concentrated on local seasonal produce for our menus but obviously also used imported ingredients. My current businesses, however, which arrange money for property development and all business finance needs, will be unaffected.
But others will potentially be seriously affected by a no-deal Brexit. For example, the motor trade, which is not just the major car companies who are actually assemblers as much as manufacturers, and the pharmaceutical industry.
Regardless of a deal or not, Brexit will almost certainly impact British business, especially SMEs, so managers and employers should be ‘prepping’ for the uncertainty their companies’ face as we approach uncharted waters – now just a matter of months away.
I learnt as a kid not to panic, not to cheat, not to cut corners – all good lessons. I also learnt to study the rules and use them to my benefit, which may or may not be as they were intended to be used! And so it is with a no-deal Brexit. First you need to understand exactly how it will affect you, indeed if it will affect you.
If it doesn’t affect you, or affect you much, you don’t say great and head for the golf course. You look at how you can use what is happening to benefit your business. I write this on VJ Day 2019 and can see a clear line connection between then and now of opportunity for businesses not affected or not seriously affected by a no-deal Brexit.
But for those businesses it will affect, how can they prepare for what they don’t know? The key is to focus on the present because they will know more than they realise. My great grandfather, a London docker, taught me much, but would always say don’t moan about the hand you’ve got, it’s the only one you’ve got so understand it and use it to get the best possible result. And so it is here. The problem, the real problem, for all businesses large and small, is the cost of what could be abortive preparation. And cost isn’t just money, it is time and resources. Time, resources and money that could be better invested in business development than manning barricades.
Although it is still unclear what a no-deal Brexit will entail, that does not mean businesses cannot strengthen themselves for whatever may be coming – starting now. They have to, this is a very real TINA moment!
There are two key areas to focus on:
- Retaining A Quality Workforce
With record employment – 32.81 million people – shear body numbers are becoming hard enough and driving staff costs upwards with wages rising 3.7% in the last year. At any time, recruiting, training and keeping quality staff is difficult, as I well know in the SME world, but with full employment it is a nightmare without the added impact of a no-deal Brexit. So the number one thing UK businesses should concentrate on with the threat of leaving without a deal, is how they will continue to attract and retain talent. You shouldn’t be able to do more than you do now, but we all know they can.
It is inevitable that a no-deal Brexit will have an impact on the mobility of our workforce and employee churn is likely, with many individuals, both nationals and non-nationals, expected to leave the country. This will inevitably create gaps, possibly serious skill gaps, in certain areas of the market.
The first challenge will be to prevent those gaps opening up in your business, but if they do, you need to have a plan to fill those gaps. And I mean a carefully thought out, detailed and costed plan because that will not be achieved by one action alone. There is no one-size-fits-all answer. Plan for it now. The days of “Ostridge management” in the 1960s and on into the late 1970s when high inflation bailed out badly-run businesses are over. Acknowledge, act, achieve!
Therefore, it is essential that employers are realistic, practical and forward-thinking. They must think creatively about how to protect their workforce – which may mean looking beyond salaries and thinking about what their key players really value.
- Scenario Planning
Entrepreneurs must strengthen their financial knowledge with the potential of a no-deal Brexit being a real possibility. Business owners should ensure they know their numbers thoroughly, especially any weak points. It won’t just “be alright on the night”, it will be carnage with that approach.
In a no-deal Brexit landscape, managers, leaders and entrepreneurs will need a nimble mindset. With the benefit of technology, the smallest of firms can model potential scenarios at modest cost, changing the input to predict different potential outcomes. When I was a corporate planner in the Midland Bank in the mid 1970s, we had a machine in London linked to the States and after inputting variables, we had to wait five days to see the impact – now you can do it on the phone in the pub, coffee shop or on the train!
For example, if the cost of importing a key raw material went up by 10 per cent, what effect would that have on your bottom line? What about if it were 15 per cent? What measures could you potentially take to offset the impact?
On the other hand, could new key markets open for you, allowing your operation to expand?
What A No-Deal Future Holds
Ultimately, UK businesses need to have a clear plan in place as we edge closer to the deadline, because the reality is that no one knows what the future holds post-Brexit.
The fundamentals lie in focusing on retaining key talent, being aware of your strengths and weaknesses, and understanding how vulnerable you are to the different scenarios that may unfold.
When my grandchildren reach five they will get a hard wooden brass inlaid domino set from me. On the back, broken up so the dominos have to be lined up correctly to spell out the message, it says, “Let the only limit on your horizons be your imagination, and let your imagination be unlimited.”
James Dashner wrote, “Be unpredictable, be real, be interesting. Tell a good story.”
All of that would seem to sum up what’s needed for a no-deal Brexit Day!
About the Author
David Selves is a business advisor at The Selves Group. He has enjoyed an eventful 50-year career as a seasoned broadcaster, entrepreneur, publican and hotelier. Making his name in business hospitality by purchasing struggling hotels and turning them into award-winning venues, David has built a reputation as a respected and highly regarded businessman. He was also the former Regional Chairman and National Board Member of the Small Business Bureau.
