The UK is due to leave the European Union in 100 days: on 31 October.
The UK Government is committed to Brexit happening on this date, with no further delays. There is a possibility of further delay but the chances of this are now much slimmer. It is increasingly likely the UK will leave the EU on 31 October: deal or no deal.
The chances of this being a no-deal Brexit are higher too: as Ministers indicate they are prepared for this; and the EU, UK and MPs all look unwilling to compromise.
When the EU agreed to extend the Brexit deadline in April, the EU President advised “use this time wisely”. So, what should businesses be doing over the next 100 days?
Prepare for no-deal
My advice would be start planning for a no-deal Brexit now, if you haven’t already.
If you have a Brexit plan, review it, rehearse it and be ready to implement it (or start implementing it).
There is still time to get ready; but don’t delay. Don’t wait for absolute certainty of what type of Brexit it will be: certainty will come too late to do anything. The experience of my clients over the last two years has shown that there are lots of things you can do now to prepare for no-deal that will also stand you in good stead whatever and whenever Brexit happens.
There are three steps to Brexit readiness:
- Measure impact: what risks does it expose you to and what opportunities does it create?
- Agree action plans and triggers for the biggest risks and opportunities: what do you need to do and when?
- Put yourself on a contingency footing: make sure people have responsibility for implementing the plan; review progress and track risks.
There is plenty of guidance on what a no-deal Brexit would mean. My colleagues and I at Grant Thornton have produced a simple guide here: www.grantthornton.co.uk/brexit-essentials
Common risks and mitigation
Based on working with businesses large and small and in all sectors the following are the most common risks and some of the actions you can take now:
- Reduced market access in EU: map regulatory compliance for goods and services in EU
- Supply chain failure: assess supplier readiness and watch for financial vulnerability
- Compliance with new customs requirements: obtain an EORI number and review your customs processes
- Inability to deliver key orders: review stock, logistics and travel for orders and projects scheduled for October-December 2019
- Reduced retention and recruitment in your workforce: advise EU citizens on their right to remain and how to apply for settled status; and agree a checklist for people on EU assignments (e.g. driving licence, health insurance, work permit etc)
- Cumulative costs (including tariffs, customs administration, workforce requirements, weak £, labour market inflation): reduce costs; optimise working capital.
Opportunities for growth
Brexit will create disruptive change. And disruptive change also creates opportunities. Common areas of opportunity my clients identify and are planning for include:
- Acquisitions: opportunities to acquire under-valued assets
- New products and services: supporting customers’ Brexit needs
- Competitive advantage: how does your exposure compare to competitors?
- New UK tariffs: the new no-deal UK tariffs are in some cases lower than current tariffs for imports from non EU countries; this can create cost benefits some supply chains.
Every business is different and small differences in operating models can significantly affect the impact of Brexit. So do take time to assess the specific risks and opportunities for your business. Planning for Brexit should increase your confidence – and enable you to provide your people, investors and customers with confidence.
Last year I had a huge increase in calls from clients straight after the August bank holiday, seeking help with developing and refining their Brexit planning. Last year they still had plenty of time to prepare; this year Brexit day will be just 8 weeks or so after the late summer bank holiday. You would do well to avoid the rush and start planning now….
With 100 days to go before Brexit day, take time to assess the specific risks and opportunities for your business. Planning for Brexit should increase your confidence – and enable you to provide your people, investors and customers with confidence.