Brexit has caused much anxiety for many businesses over the last few months and continues to do so. Here’s our brief guide to surviving Brexit to keep confidence levels high during these tough times…
Now that the UK is on its way out of the EU, it’s important to keep your business afloat and not let market fears get in the way of running it successfully. There are a few things that can be done right now within your organisation to help keep things on an even keel.
Meet Brexit head on
Brexit is bringing with it many challenges. Many sectors already faces skills shortages and rely heavily on imported labour. Projects could become much more costly should access to workers and movement of goods within the current free market be restricted. In addition, many businesses benefit from investment from the European Investment Fund. If these issues apply to your business, then it is perhaps worth getting some advice about what steps you can take now to mitigate any negative impact that could result from this so that you can be over, rather than under, prepared when the time comes.
Stick to what you know
In difficult times, businesses should stick to what they are really good at and focus on their core competencies. Ensuring the fundamentals of your business and the service you offer are in good order will stand you in the best stead possible.
Be accurate with your estimates. Challenging times often lead to increased competition. Ensure you have the most up-to-date information about the cost of parts, labour and materials. Think about your business’s assets, could it be more cost effective to rent rather than buy equipment? The more accurate your estimate can be for a job, the more likely it is for you to be price competitive.
Make sure you know your margins and that all costs will be covered. Make a profit if you can but be prepared to walk away from a job if it’s genuinely not worth it. Many businesses take on too much unprofitable work during slow periods. This will do nothing to help you in the long term and can sometimes even be damaging.
Get on top of your finances
A surprisingly high proportion of small and medium sized firms are not in control of their finances. Check how you’re capturing information and how regularly you’re reviewing it.
Many companies are making cost and efficiency savings by moving to cloud-based financial management systems. They can be cheaper to run and also provide a much more up-to-date and real-time vision of your financial position. Reporting which could previously have taken days, can now be done within minutes.
Plenty of companies fail because of a short term cash-flow problems. If you know it’s coming you can take steps to remedy it.
All businesses suffer from the lag between taking a contract and getting paid. Be clear what the payment terms are and when an invoice will be settled. Keep track of the status each invoice is under. Chase those which are overdue (or set your digital accounting software to do this for you). In some cases, it can help to offer a discount for early settlement of an invoice. See our tips for ensuring your invoices get paid quickly.
Look for efficiency savings
When times are tough, businesses cut back in an attempt to improve cash-flow. This can help you survive a rocky patch but it can also leave your company weakened. Try to keep people on and maintain your capacity to ensure you’re as competitive as possible when the good times come back.
Unlock spare capacity
Every business has a certain amount of spare capacity. It could be old or unused equipment or property which is going to waste. You can sell this off, or rent it out – anything to unlock hidden value within your company. You might not realise it yet, but there could be a considerable amount of spare cash locked within your company.
Keep workers happy
The Brexit vote will have obvious ramifications for the high number of EU nationals who work in the UK. They will understandably be feeling nervous about their future as debate rages, but it’s important to keep them happy. Reassure them that there will be no immediate consequences for them and their families. In all probability those already here will retain their right to stay.
Last but not least, don’t panic. Brexit may sound scary but it hasn’t happened yet. Much of the fallout so far has been sparked by market shocks. We are yet to trigger Article 50 which will then merely mark the beginning of a two-year divorce process. Even then, there’s no guarantee of what form the exit will actually take. So take a moment to step back and resist making any knee-jerk business decisions on the basis of recent turbulence. For all the challenges that lay ahead, the fundamentals of your business remain the same.
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