It’s a good question.
Brexit is perhaps the single biggest political and economic upheaval our country has seen in over a century, and it brings with it a whole heap of uncertainty. Not just because it’s a big change (which always brings uncertainty), but because we still don’t actually know what’s going on, when it’s going to happen, what any of the details are – or if it’s going to happen at all.
But for business owners, this just isn’t acceptable. In order to run a successful business, we need to be able to forecast possibilities, to understand the impact of our decisions and plan for the future. Having spoken to many business owners about the impending Brexit dilemma, many have expressed frustration that they don’t know how to go about planning for it when there are so many variables. So aside from investing heavily in gold and hoarding it all under the mattress in case the pound goes south, is there anything businesses do to plan for Brexit?
In uncertain times, a business’s ability to be flexible and agile can be the difference between survival and failure. So, the aim now should be to factor flexibility into your business planning at every stage, so that you aren’t left under pressure when the final Brexit deal emerges. There are a variety of ways you can bring more flexibility into your business. For example, you could invest in staff training for any skill gaps you may have, consolidate your customer base, or increase your marketing efforts to generate more long-term clients to bolster your revenue stream. You will also need to make an effort to understand your cashflow – where your money is going, what you are spending it on and what benefits that brings. This gives you a much clearer view of your business ability, where you could reduce spend, and help you build up a buffer in your bank account so that you can weather whatever storms Brexit may bring.
Operational planning will be a key area for many businesses. Ask yourself (and be honest) – does your business have clear processes in place to make sure you are a) delivering your product/service efficiently, and b) maximising profit in the process? For example, can you produce accurate and timely financial data to help decision makers analyse the impact of their decisions, and make better ones? Can your key decision makers actually interpret that data and understand what it means? Do you know if your business has the ability to fund growth internally, or do you need external funding that might be at risk thanks to the Brexit instability? All of these are important questions to answer, as they help you understand where you can change your operations to maximise profit and improve stability. They will also help you account for any changes to the UK market, and see if you need to get some external support to help you develop a strategic response to Brexit.
Above all, practice scenario planning. Brainstorm a wide variety of scenarios that Brexit could cause, from the heavily predicted to the slightly more ‘out there’. Then sit down and work out how you would react to all of them individually, or a combination of them. Think of it as creating your survival plan – outline the scenario, what you will need to survive, and what you will do to achieve that. Try to model 2 to 3 variables which will give different outcomes – I recommend creating a best, mid and a worst-case scenario for the business – taking into account things like cost of goods going up, any EU workers having to leave, or the impact of your customer service. You may have a number of divisions or categories you work in, one of which might be impacted more than others. Remember to take into account where you are in your financial year, and then analyse your budget spend to date and plan for the rest of the year (or even better, a 12-month rolling period). This will help you create a quarterly or even monthly forecast, which will help you adapt to the ever-changing situation and create an agile overview plan. Getting this stage right could be the step that ultimately saves your business.
Once you have some scenario plans outlined, write them down. Even if they are just rough ideas at this stage, having them written down means that they won’t be forgotten, and anyone could follow them if they need to. It’s not about spending lots of time on it, it’s about doing it and getting management to buy into it. This means that when it is finalised, it is not just the CEO’s plan and he or she doesn’t have to then go and sell it. It has to be agreed, bought into, and ready to implement.
But at the end of the day? The answer to ‘how do we plan for Brexit’ is still a firm ‘we don’t know’. No one can predict the future, so any suggestions about what the business landscape will look like, what will happen to the markets or what would be the best way to prepare for them are mostly speculation. But with proper planning, understanding of different scenarios and regular monitoring of your budget and cashflow allow you to plan properly and gain true flexibility in your business.
We know that Brexit has filled thousands of column inches for many years, it isn’t the only thing to do so. If you were to go back over the last 100+ years you would find similar fear-inducing events dominating the news, with uncertainty plaguing the headlines. So, my best advice is to try and make some smart business decisions, protect what you have and make yourself and your business as agile as possible, so that you can adapt to whatever comes. If you would like some help understanding how to do that, all you have to do is get in touch for some expert advice.