General Risks of Brexit
On the 29th March 2019, Britain will leave the European Union. An imperative concern for almost any business – large or small – is the how to prepare itself for the shakeup. Politicians have offered less clarity than we would like, which makes planning difficult. What Brexit might look like – beyond the vague hypothetical scenarios of ‘hard’ or ‘soft’, ‘Norway-style’ or ‘Canada-style, and ‘deal’ or ‘no deal’ – remains unknown.
The concerns and fears of big business – articulated almost daily by the CBI, PWC, the Bank of England, the Financial Times, celebrity business people and many others – have been heard loudly. They deserve to be. But the fears of small and medium sized enterprises, which lack these influential mouthpieces, has often been lost in a debate where political point scoring too often drowns out dispassionate and sensible risk analysis and scenario planning.
Big businesses have much less to fear from Brexit – whatever it looks like – than small businesses. As well as being privy to superior market intelligence (and sometimes insider information) large companies have teams of professional forecasters, risk analysers, and compliance consultants who have been hard at work preparing these organisations for the full range of Brexit scenarios since 2016. They have put in place plans to minimise disruption from changes – including those to customs regulations, product and service technical compliance, contracts, supply chain mapping, workforce changes, and cashflow and stock disruption.
Small businesses quite simply lack these planning and preparation resources. Remarkably, while the Federation for Small Businesses’ data reveals nearly half (48%) of companies surveyed believe Brexit will have a negative impact on them, only 1 in 7 of them are actively preparing for a ‘no deal’ Brexit and many have done no planning at all. This is almost certainly unwise: we analyse the risks of Brexit to SMBs in more detail here.
The differential impact of Brexit is thus likely to massively favour larger companies, which are so much better prepared to weather the storm. They will then be well positioned to benefit from reduced competition in the post-Brexit trading world, and to reap the rewards from the likely recovery to business confidence once uncertainty is removed and the market can see what Brexit actually looks like. Of course, some small businesses will also be able to benefit from the inevitable huge shakeup: they can for example increase market share and benefit from reduced costs and falling prices. But only those that are properly prepared for Brexit’s impact, and can benefit from the bounce-back once the shock has been absorbed.
Trade Profit Stabilization (TPS) is an innovative product that will enable your small business to prepare for the uncertainties of Brexit. It represents an inexpensive shield to protect your profits and access to a defensive mechanism that big businesses currently have, but the vast majority of underprepared small businesses do not. But TPS does not just allow you to sure up your current position: it can also let you take full advantage of the opportunities that accompany every threat. History is littered with examples of challenger companies, which manage to weather the storm of recessions or financial turbulence while competitors weaken or go under, and then find themselves in a position to benefit from the new market conditions that emerge in their wake.
TPS could help your business be a survivor – and then a big beneficiary – of a business world turned upside-down by whatever Brexit emerges.