How Can Small Businesses Get Ready for Brexit?

How Can Small Businesses Get Ready for Brexit?

As if small businesses didn’t already have enough on their plates trying to contend with the Covid-19 pandemic, they will also face a host of additional challenges when the new rules about the relationship between the UK and European Union (EU) come into force from next year. The UK left the EU on January 31, 2020 after the withdrawal agreement was signed between the two parties.

After a 12-month transition period, the next step is the implementation of the new rules, which come into effect on January 1, 2021. They will affect a range of key areas including trade and immigration.

Between now and January, SME owners and managers, particularly those that import or export products or services to the EU, need to make sure that they are ready for when the new trading relationship is established. Here are five key steps you can take as a business to ensure you are prepared:

Secure your supply chain

One of the biggest uncertainties about Brexit is how companies will continue to do business once the new trade deal between the UK and the EU comes into place. Supply chain disruption can have a devastating effect on small businesses. If you haven’t already, you need to establish strong supply chain partnerships by communicating regularly with your suppliers and coming up with a plan that covers all possible outcomes and gives you time to deal with any problems that may arise. It could be wise to look at forming partnerships with other suppliers, particularly those from within the UK or outside of the EU, to help minimise the effect of Brexit.

Make sure you have enough goods in stock

If you rely on importing goods from other countries, particularly the EU, you should build up sufficient stock in case of delivery disruption and to ensure you can keep supplying your customers. This also gives you a buffer if there are supply chain problems, and, if necessary, more time to negotiate deals with new suppliers.

For example, the government has urged pharmaceutical firms to have six weeks’ worth of drugs stockpiled, in readiness for the end of the transition period. Airbus has also ordered suppliers to have at least one month’s worth of extra inventory on hand. In addition, WHSmith has stockpiled six months’ worth of pens.

You will need to pay more up front to cover the cost of additional inventory as well as keeping on top of invoices and payments owed and maintaining a strong cash flow.

Keep a close eye on regulatory and legislative changes

With the change in the relationship between the UK and EU, a raft of new legislation and regulations are due to be ushered in that SMEs will have to adhere to. You need to be aware of all potential changes and devise solutions to deal with them. You can also sign up to receive the latest Google alerts for Brexit regulatory and legislative changes, as well as follow @govuk and @cabinetofficeuk on Twitter for updates. Minor amendments have already been made to the government’s health and safety regulations in preparation for Brexit, mainly relating to removing references to the EU.

For regular updates on Brexit visit the government’s guidance page or sign up to alerts here.

Here is more information for importers and exporters.

Assure the status of your employees

If you have EU national employees who work for you in the UK they need to apply to the Home Office for permission to stay in the country after December 31, 2020. If they aren’t allowed to do so, you will have to look at other options such as them remote working from another country or outsourcing the work. From January 1, 2021, freedom of movement between the UK and EU will end and employers will have to apply to the government for permission if they want to recruit from outside the country.

Take advantage of support schemes and loans

There are plenty of government and trade organisation support schemes and advice available to help small businesses make a smooth transition to life outside of the EU. They offer practical tips on how to make the most of trade opportunities and to mitigate the effects of the withdrawal on trade. At Cubefunder we also provide small business loans that can help to support you.

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