Ten FAQs about Brexit and your small business
- Are you in a business that is heavily affected?
- If you don't buy or sell directly to the EU but your suppliers or customers do, will they be impacted?
- Do you need to find alternative suppliers?
- Do you need to increase your inventory or buy additional storage space?
- What will the legal position be if deliveries are delayed or orders cannot be fulfilled?
- Do you have enough cash to see you through any difficulties?
- Do you have existing employees who are EU nationals?
- Have you planned any work-related travel in the EU?
- Have you spoken to your staff, customers and suppliers?
- Where can I get more help?
1. Are you in a business that is heavily affected?
If you import or export goods from/to the EU, there's an obvious impact. There are many preparations that you should by now already have taken. For example, applying for an EORI number (Economic Operator Registration and Identification) and planning how you will provide trade and customs clearance documentation if it is required.
Find out more with government guidance for:
Even if you don't trade with the EU, your business is likely to be affected - either directly (for example, if you employ EU nationals) or indirectly (for example, through the knock-on effects on your suppliers and customers).
2. If you don't buy or sell directly to the EU but your suppliers or customers do, will they be impacted?
It may be impossible to get to the bottom of this question - how much your suppliers are affected will depend on their suppliers, and so on. But it's worth making an effort, certainly in terms of your most important suppliers and customers.
Get in touch to ask them about their plans and any problems they anticipate. Keep up to date with regular communication.
3. Do you need to find alternative suppliers?
In a perfect world every business would have supply options. So if you are selling flowers or vegetables that come through the Channel Tunnel and might get stuck at the border, you might have a UK grower that you can turn to.
The sooner you can act, the better. Brexit affects every business in your situation, so UK alternatives may already be committed elsewhere.
4. Do you need to increase your inventory or buy additional storage space?
This is what a great many manufacturers, distributors and retailers have been doing. Can you work out which items would cause you the greatest loss if they became unavailable for any length of time?
Given the continuing uncertainty around final details - and the impact of the coronavirus pandemic - aim for as much flexibility as possible.
5. What will the legal position be if deliveries are delayed or orders cannot be fulfilled?
Do any of your customers have penalties for late delivery? If a supplier is unable to supply you on time, so you are late with delivery to your customer, is that customer contractually able to impose a penalty charge on your business?
Review your trading terms so that you know where you stand.
Equally, what will your rights be if your suppliers let you down? You may want to check the details of your contracts to see what reasonable compensation you could be entitled to. Working with your suppliers - who might themselves face significant stresses - is likely to be a more productive approach than making unreasonable demands.
6. Do you have enough cash to see you through any difficulties?
Many businesses have taken the step of increasing their overdraft facility, just in case. You will have to pay a setting up charge, but at least you will only pay interest if you actually end up using the money - which is what an overdraft is designed for.
If an overdraft is not available, look at other funding options, such as asset finance or invoice discounting, as a way to free up some cash in case you need it.
- If your bank turns you down, you are automatically offered a referral to funding platforms that can help you find other lenders.
- Check for other sources of finance and support for your business.
The most important thing is to have a reliable cash flow forecast in the first place. So if things go wrong and problems do arise, you can plug the new figures into the cash flow and work out what needs to be done.
7. Do you have existing employees who are EU nationals?
Existing employees who are EU nationals will need to apply for settled status.
Plan for the relevant deadlines and immigration compliance in general.
8. Have you planned any work-related travel in the EU?
For any travel to the EU, you should:
- check that your passport will be valid, with at least six months left
- get any travel insurance you want (EHIC cards will no longer be valid)
- organise an international driving licence if required
- check for any additional business travel requirements
9. Have you spoken to your staff, customers and suppliers?
Brexit is an unsettling topic. Communicate your expectations of 'Day One' and confirm your working assumptions versus theirs. Listen to any concerns that people have. Provide reassurance about any Brexit issues that your business faces and the plans that you have put in place.
10. Where can I get more help?
The UK Government has published extensive Brexit transition guidance. This includes a quick self-assessment tool to see what you might need to do, and the option to sign up for updates.
Other useful sources of information include:
- the ICAEW Brexit checklist - a useful quick start guide to key issues, along with links to further information
- the Scottish Government's Brexit checklist of low-risk, low-cost actions to take
- the FSB Transition Hub
- advice for your sector from your trade association