The Prime Minister has begun the two-year Brexit process so now is the time to start planning ahead.
1. Check your existing contracts. Do any of them rely on Rome I Rules? What do they say about when and where contractual challenges will be brought? Do they reference the EU or the UK as a member of the EU? Do they take into account the possibility of cross-border services or assume free movement of people, capital and goods? What about employee contracts: many of which are based on EU law? All these areas need to be checked and resolved before we finish exiting the EU.
2. If your business makes payments overseas, exports goods or imports raw material, have you considered the effect of a significant change in the value of sterling? One option to stabilize company finances and reduce costs could be to use currency services via a broker rather than your bank. This way you may be able to fix prices for a period of time, sometimes up to two years.
3. Make smart economies where you can now in case things become a little tighter financially later. Review your utility providers, your insurance and other contracted-out services. Are you getting the best value for money? Switching may involve a little effort, but the savings can soon add up.
4. Explore options to diversify your client base if you are currently EU-focused. For smaller companies it may not be practical to jump on a plane halfway round the world. However, the government offers UK businesses the UKTI (United Kingdom Trade and Investment) service that provides tailored support and the possibility of face-to-face advice to encourage the growth of international trade.
5. Look at your finance options. If the pound weakens, banks may feel the need to reduce their exposure. Companies that rely on their overdraft to maintain cash flow could face issues if these are suddenly withdrawn. Concurrently, interest rates may rise for traditional sources as the larger banks look to maintain their stress-test robustness. It may be worth investigating peer-to-peer lending (P2P) in advance. This offers an alternative source of loans with potentially more competitive interest rates as P2P is less geared to external factors and not linked to the base rate.
If you need help or advice, feel free to get in touch via our website or call us on 01202 678555.