Andrew Dark is the Director and Co-Owner of Custom Planet, a young and successful UK printing and branding business. Here, he shares his insight into the effect Brexit will have on businesses like his, as well as some tips for how to prepare for a no-deal outcome.
On 31st October 2019, Britain will leave the EU. Whether you voted leave or remain in the referendum, your business will be impacted by this — especially now that a no-deal Brexit is all but confirmed.
The main issue is that a no-deal Brexit means a lot of unknowns, for us at Custom Planet as much as anyone. We don’t fully know what no-deal means yet, so it’s impossible to be totally prepared — but we have taken as many precautions as we can.
Below, I’ll talk you through how a no-deal Brexit could affect Custom Planet and other small to medium sized businesses, as well give you some suggestions for how to navigate through the transition period.
Some Good News
One good thing to come out of Brexit already is that the government is starting to do more to protect UK businesses, like the committee that is being set up to review late payments. Late payments are a huge problem for almost all small and medium-sized enterprises in the UK because large firms can take 90 days — or even 120 days — to pay them for the work they’ve done.
As a result, SMEs have to decide between turning down large orders, due to the risk involved; or taking them, potentially leading to cash flow problems. These can be especially fatal to start-ups and small businesses, so the government addressing problems like these is a great start.
Some Bad News
The bad news is that the UK’s GDP forecast has more or less confirmed that a no-deal Brexit will have a negative effect on the economy — at least in the short term — so there is a real concern that, if we do get to that point, everyone will tighten the purse strings and companies will cut back on anything non-essential. Unfortunately for us, branded workwear and promotional materials can often fall into this category, so a no-deal Brexit could be a real blow for a business like ours.
Another issue is that our industry uses a lot of products imported from the EU. We buy blank clothing and accessories for printing, inks, machinery and a whole host of other vital products, and a no-deal Brexit means that some EU imports could be met with WTO tariffs, increasing the cost of goods. Not only that, but potential delays in the supply chain will likely mean delays to production times and costs going up for our customers if we don’t adequately prepare for them.
What We Can Do?
For our part, we have spoken to all our suppliers to ensure the supply chain is as robust as possible. Most of them have ordered additional stock to cover a period of disruption over the first few months, so hopefully that is enough to keep us running. We will also be increasing stocks of vital supplies and holding back on any unnecessary purchases of machinery, and we won’t be taking on any new full-time staff for the time being.
These measures will ultimately have a big effect on the economy and job market if other companies are taking the same precautions we are, but they are necessary to ensure the business can stay afloat long term.
Overall, we are still growing year on year and we are busy both in sales and production. We’ve prepared as much as we can, we just have to hope that any disruption after 31st October is minimal.
About Custom Planet
Custom Planet is an SME based in Newcastle upon Tyne. Founded by two friends in 2008 while they were still at university, the company designs, creates and manufactures high-quality custom clothing and promotional materials for some of the biggest organisations in the UK, including Proctor & Gamble, Marriott Hotels, and Northumbria University.
