As part of our ongoing series of weekly features, we asked our expert panel the question;
How Can Welsh Businesses Best Prepare For Brexit?
Our panel's thoughts can be found below, but if you would like to contribute to this feature, or any of our future features, please contact [email protected]
Karen Thomas | Head of Corporate Banking
Whilst many of the key issues in respect of Brexit are unresolved the majority of businesses will already have started to undertake some work on the following areas:-
- Reviewing aspects of their business that rely on EU arrangements. For example could their business benefit from AEO status? (Authorised economic operator status). If so consider applying early.
- Understanding the likely position of the UK (and ambitions) in terms of exiting the UK and understanding the UKs obligations under the WTO.
- Considering the impact of supply chains and their customer base – more complex procedures may mean holding more inventory and how any of the above may impact financial stability and arranging early conversations with funders.
- It’s also worth considering other key areas in your business such as employment rights, contracts (look to make new contracts as Brexit proof as possible) and sharing of personal data.
- Contingency planning is key and while you may not be able to foresee every possible scenario, highlight the impacts which could be business critical and devise strategies to minimise such impacts.
As the Government steps up preparation they have advised that 70 technical notices will be published later this month and into September advising companies on how they can prepare for a no-deal Brexit.
Many banks and advisors are also hosting a series of calls and events to support clients through this uncertain period and successful businesses will already be keeping abreast of ongoing developments to ensure they maintain an even keel however choppy the waters get.
John Mills | Digital Business Integration
As the approach of Brexit marches towards Welsh businesses, it’s now you should be planning strategies for engaging not only EU-based markets, but also new markets that will be emerging by necessity in the very near future. For businesses that either buy or sell internationally, logistics can be a difficult part of working with what may be far flung destinations who speak different languages.
To this end, receiving and tracking shipments requires a lot of careful consideration and planning. Once you have identified your market, logistics management systems can help bear the brunt of the issues of international shipping and tracking technology can also be a major help in ensuring your deliveries are getting through on time and to the correct locations, saving you time, money and, most importantly, customers. To provide the most efficient methods, electronic shipment tracking technology is already available which can help plan trade routes, monitor any trade restrictions, and track shipments.
Also, you may be moving in to trade areas where English (or Welsh!) is no longer the lingua franca. It is crucial to be able to communicate effectively with customers, suppliers and business partners. There are a number of ways of approaching this possible barrier, using tools such as web-based translation companies. Whilst online translation technology has made great strides, it’s still advisable to have a fluent speaker or professional translator check your communications to avoid any inaccuracies. If you plan to do business with partners or customers in a non-English speaking region for an extended period of time, learning the language can save you money on translation costs and give you leverage against competing businesses. There are numerus online learning facilities for most major languages, and, of course, software programs that can help you become fluent in a foreign language, whether it be Chinese or German.
As you plan for Brexit, don’t forget to explore all of the ways technology can help you grow, whether it’s by providing better customer service, improving your logistics or helping you communicate with your customers. It all contributes to your future success. Visit the Superfast Business Wales website to find out how we can help.
Graham L Morgan | Managing Director
The simple response to BREXIT every Welsh Business should have is ‘dust off your 3 year Strategic Plan and make sure it is up to date’! Sadly many Business Owners do not have such a plan and hence will leave their fortunes for the next few years to chance.
So what aspects of BREXIT will impact on the average Business in Wales? In simple terms the following areas need reflection:
- To what degree do your Raw Materials and Fuel supplies link to Europe or indeed the wider world? Understanding where your suppliers source what they sell to you is important.
- Do you export? Which markets and what are the associated risks?
- Labour – not only impact on your business but also your supply chain.
- How flexible is your business model to respond to opportunity and threat?
Due consideration now for what may lay ahead is the best response to both the uncertainty but also the many opportunities that may arise.
We have certainly witnessed an upturn in Business Owners seeking support with Strategic Planning.
David Beaumont | Regional director for Commercial Banking
When we speak to Welsh firms the overwhelming feedback we receive is that, although the current lack of clarity is concerning, it’s very much business as usual. We’d advise company leaders to regularly revisit and refresh their business plan, ensuring they have sufficient cash flow available to mitigate challenges or capitalise on new opportunities.
Using a professional adviser as a sounding board for new ideas or to discuss potential issues is also advisable. Organisations, such as Business Wales, have teams of advisers that can provide the objective guidance firms need to address all potential outcomes.
At Lloyds Bank Commercial Banking we also have a network of local relationship managers that truly understand the Welsh business landscape and can supply the specialist support that firms need to prosper during this uncertain time.
Andrew Willis | Head of Legal & Advisory
We are now less than eight months from the date on which the UK leaves the EU, but it has yet to be decided what sort of relationship we will have going forward – with potential knock-on effects for a transition deal.
This is causing uncertainty since a significant proportion of UK employment laws derive from EU law – including provisions around discrimination, collective consultation obligations, TUPE, family leave, working time regulations and the rights of agency workers.
For now employers need to keep a watching brief. It is unlikely there will be any dramatic short-term changes whatever transpires, however businesses employing EU nationals will need to keep a close eye on any changes to immigration requirements. Their EU workers will need to get clearance via the EU Settlement Scheme if they wish to continue working in the UK; any EU worker who is subject to the scheme and doesn’t get clearance will be working illegally and this can leave employers open to the risk of significant fines.
Dr Debbie Garside | CEO
As with all periods of economic uncertainty, we need to knuckle down and get on with the job; as a nation, it is what we are historically renowned for doing.
There are lots of politically motivated scare tactics and hyperbole surrounding Brexit currently and unfortunately, when even the Bank of England is getting their predictions wrong, industry is simply just holding its breath and awaiting the outcome of the Brexit ‘negotiations’.
The biggest challenge facing the UK currently is with low levels of unemployment. Levels are at a 40 year low, and it is a skills shortage impacted by the fall in immigration since the Brexit vote that is hitting most businesses. This skills shortage means that salaries must rise so that the UK then becomes more attractive to overseas workers. We need immigration to grow our economy.
At the same time the strain on the UK welfare state has dramatically reduced and this is the time for Government to be looking at investing some of this reduced liability in the 8 million people aged between 16-64 who are currently economically inactive. It is these people who can help fill the skills shortfall in the short term.
Economies fluctuate and as businesses we need to be agile and adaptable. So my advice is hold your nerve, spend time and money recruiting the right candidates for your business and once recruited, look after them! It is always more economical in the long run to retain and train than to lose and recruit.
Simon Jones | Senior Partner
The good news is that Brexit is coming at a time when there are lots of opportunities on the horizon in Wales – a focus on developing the financial and professional services sector in the Cardiff Business District, huge investment in infrastructure by the Welsh Government, and City Deals in Cardiff and Swansea.
So now is not a time to stop progressing. In fact it may be that a number of Welsh businesses could seize opportunities out of Brexit. But to achieve this, or even to simply weather the storm, businesses must be organised. Don’t be tempted to leave it until more is known, or to follow what another local business is doing – you need your own tailored strategy. That can be overwhelming, but break it down into stages.
First off investigate your risks. You need to study your contracts, suppliers, staff, customers, market access and data flows… Then ‘triage’ your decisions off the back of this – what do you have to do and what can be delayed until you know more?
Then start planning! Key areas are of course supply chain resource, workforce response and finances. Take a look at KPMGs’ Brexit Navigator which might help you get started.
M4 Media & Training
Laurence Winmill | Chief Executive Officer
Brexit is the biggest challenge to the UK since the end of the second world war. We are in unchartered waters but whilst business must stay engaged with the political decisions and prepare their business strategies in line with any new legislation, business also has an obligation to be creative and entrepreneurial so that they may identify and take advantage of the opportunities that lie ahead.
Dale Williams | CEO
Businesses are still weighing up how they will be affected by Brexit. As the nature of the Brexit deal is still unclear, there is a lot of uncertainty and organisations are only able to plan for the short term. However, companies shouldn’t take a ‘wait and see’ approach and should start putting contingency plans in place to protect themselves.
To mitigate the risks that Brexit could bring, I would advise companies to begin by undertaking an audit of their current workforce so they have a clear idea of what their organisation looks like. The future of the business can then be reviewed and the possible need to recruit in order to achieve long-term goals may become clear. Businesses should focus on creating a workforce plan that provides the skills and people they need for whatever type of Brexit we are faced with.
Companies also shouldn’t be afraid to seek advice from recruitment agencies like ours. Our extensive knowledge of the market means we can offer the appropriate advice so they can protect themselves from the risks an uncertain future may bring.
Andrea Lombardi | Food and Drink Associate
As published by the known newspaper “The Guardian”, two thirds of businesses are not prepared for Brexit. Then, how can welsh companies prepare themselves to post-Brexit?
Welsh companies will have to analyse their current and potential supply chain again and know whether that will change once the UK will leave the EU as well as understanding the huge crux regarding to the effect on VAT.
It is easy to image that the VAT may be abolished and this will give many uncertainties not only because UK will lose a huge part of tax revenue, that would appear catastrophic if it should be generated from elsewhere, but also because the most part of countries operate a VAT system.
Without VAT deal with EU, businesses have to pay the VAT upfront in cash on all imports from outside of UK affecting their Cash-flow and creating emission of funds before they can be recouped.
The Currency is still the great effect of Brexit, we know the value of pound may be depreciated around 20% and a weak currency means to import more expensive goods giving lower margin, but on the other hand this would promote export and tourism.
For this it is very important to have a soft Brexit to maintain the positive trend of current UK economy and give a small impact to the local companies.
The companies will have to increase the inward investment and find a new way to make enterprise such to create streamline firms which are able to quickly adapt to the changes of market. The companies will address their business into the international markets following a weak pound changing their business and website in the languages and currency of the international customers. They also could exploit of the foreign workers to have an unexpected local growth.