07 Mar Is your business ready for the post-Brexit challenges?
Uncertainty and instability are often severe challenges, but they can also become sources of opportunity, and for the UK’s SMEs who stay nimble, decisive and focused on what they can control and influence, the chance to thrive in a post-Brexit climate is there for taking. But beyond the B-word, what are the main things that business leaders should be focusing their attention on in the coming year?
1 Unlock and invest in existing talent
If the fabled talent exodus from the UK post-Brexit bears out it is paramount that SMEs invest in their workforce now to cement the skills needed to propel their business forward. Experts agree this is time for recruitment action rather than caution.
All businesses should:
- Identify any gaps in their current and future workforce
- Seize the opportunity to consolidate their talent in-house
- Boost retention with internal promotions, further training and employee benefits
- Protect employees who may have concerns about visas and citizenship so they can continue to live and work in the UK legally.
“Highlight whether they’ve got the means of remaining in the UK in the future, be this via a residence permit, card, settlement or permanent residency,” suggests Jonathan Beech, managing director of immigration law firm, Migrate UK. “Companies with genuinely skilled vacancies should also consider applying for a sponsor licence to sponsor non-EEA nationals to work or study in the UK so that they have access to a wider pool of talent post Brexit.” Whether Brexit results in a talent exodus or not, ensuring that your team is fighting fit is rarely a bad idea.
2 Stockpile to strengthen the supply chain
For businesses that rely on EU imports, some prudent tweaks to the supply chain ecosystem will be sensible if they want to minimise delays associated with trading tariffs likely to be enforced by Brexit.
A key weapon in the armoury could be greater clarity about where their products may be at any time. “Investing in the requisite software capable of providing clear delivery costs at the point of checkout will save SMEs a lot of hassle,” advises Dan Ennor, commercial director at Global Freight Solutions (GFS). He also mentions taking pre-emptive measures by building up reserves of stock in the UK at current prices, should fluctuations later down the line hamstring profits.
“This will give more time to work on a solution while not impacting the businesses in the short term,” he says. “Also, begin discussions with their suppliers now rather than waiting until after Brexit has gone through.” He also recommends creating a delivery strategy “to take advantage of trading opportunities outside the EU and within fast-growth marketplaces like eBay, Etsy or Alibaba, which can ensure a business is prepared for all eventualities”.
Gavin Opperman, group business banking director at Yorkshire Bank, says: “The macroeconomic picture is clearly having a major impact on business decision-making. Many of the SMEs we support are seemingly adopting a ‘wait and see’ mentality until the medium-term position becomes clearer, especially when it comes to trading arrangements post-Brexit.
“Business is resilient, but investment decisions can and often will be paused or postponed until the likely outcome can be fully assessed. We’ve seen our business customers making preparations, while some have considered stockpiling goods as they look to shield themselves through a potentially turbulent period ahead. Businesses are generally reactive as opposed to proactive at the moment.”
3 Find a bank that ‘gets’ you
A supportive banking partner will be the Holy Grail for SMEs that need to keep investing for growth regardless of doom and gloom in wider markets. Tightening the purse strings may be the default approach in uncertain times, but setting aside capital to invest in their people, products and plans will be a key part of many businesses’ strategy to stay competitive, demanding a focus on medium-term growth and securing finding lines. While access to finance can be tricky territory for smaller businesses that may be ineligible for mainstream lending products or disillusioned by red tape, businesses are reporting fewer concerns about getting extra cash than in the past.
Sudeepto Mukherjee is head of financial services at Publicis Sapient, whose technology underpins many financial institutions and helps businesses transform their finances for digitalisation. He argues that banks are better equipped than ever to help address the needs and opportunities specific to SMEs in a post-Brexit landscape.
“They now see the SME segment as a high potential area for growth so are using digital as a key enabler that can lower a lot of the barriers that existed in serving that base. They’re at the beginning of being able to do more for SMEs thanks to digital. This will be important post-Brexit to help SMEs develop and grow in the UK.”
4 Be bold with branding
As a growing number of businesses exploit the weakness in the pound and turn their attention to new markets, now is not the time to forget the kind of marketing that in the past cemented relationships with European suppliers and customers.
“Too many people are using Brexit as an excuse to become less daring, particularly when it comes to marketing,” says managing director of digital agency, Distract, Peter Watson.
“Rather than being conservative with marketing spend, maintaining momentum and forging ahead should be on everyone’s minds, with personal branding at the core. People have always bought from people but never in the way they do now. Pushing someone to the front of your business to be seen as the expert in your field will put you ahead of the competition.”
While the ad platforms of tech titans can be prohibitive to the small player on a tight budget, finding authentic bloggers with influential voices who are a good fit with the brand can be a more cost-effective way of competing with the big brands. Whatever approach businesses do take, ensuring that their voice is heard among the noise of Brexit should help keep them front of mind for potential customers, whatever way the political and economic situation develops.
5 Champion productivity
Opperman says “productivity remains a core challenge for many UK SMEs.
“It’s easy to think of this issue as a solely macro-economic concern, normally the reserve of economists or policymakers in government, but the productivity challenge could really begin to hit home at a business owner level over the next few years, particularly in certain industries, as we are finally starting to see signs of rising real wages.
“After the financial crisis in 2008, the UK’s flexible labour markets meant that unemployment didn’t spike upwards for long, but there was downward pressure on wages and for many businesses that meant they could defer investment in processes, technology and equipment, which would have made them more efficient, and instead chose to paper over the cracks by hiring additional staff.”
Fixing those cracks now will require investment in both time and money. Management techniques and restructures may be needed to get more from the staff that businesses already have on the books, while ailing technology will need to be replaced to ensure that those operating it are not held back compared to better-equipped competitors.