While there is still uncertainty surrounding whether we will have a hard or soft Brexit, it is important that SMEs prepare whatever the outcome is in 2019.
It’s impossible to know what the best course of action to take is because the overall decision is still unknown, but making small changes can help SMEs to stay prepared. Read on to find out more.
Consider a hedge fund
The sterling has already dropped in value, something that many businesses are feeling the effects of. While it has been beneficial for exporters, it has meant an increase in costs for importers. As Brexit negotiations continue, exchange rates could fluctuate even more and businesses will need to come up with ways that they can manage this risk. Hedging products that are considered complicated by traders is one resolution, as is creating a foreign currency bank account, which should help to manage the risk of changeable exchange rates.
Negotiate with suppliers for flexible contracts
If your SME works with suppliers on the continent, it may be beneficial to you to think about negotiating more flexible contracts with them before you make any decisions. If you don’t do this, you may find your business in a less than desirable financial situation if currency movements shift in the wrong way. Tariffs and custom duties might also be applied, which could mean you’d have to fork out even more money.
Reconsider grant funding strategies
There is still a lot of uncertainty with regards to the continuation of EU grant funding, however, advice from Government is that businesses should continue to apply for these until more is known about how these types of grants will operate in the future. In the meantime, organisations can assess whether UK grants are available and can monitor how these develop. For SMEs it is also worth looking for new domestic opportunities that might arise post- Brexit.
Unfortunately, it is still impossible to know what the future holds for SMEs regarding Brexit. Some are concerned about the implications while others are not. Either way, preparing for the worst-case scenario will help businesses to identify strengths and weaknesses of their current business operations.
If your SME is looking for expansion funding, or overdrafts, find out about the finance options that we have available here.