Businesses large and small are starting to panic at the prospect of a no deal Brexit and the nightmare scenario that this will bring. Despite promises from Theresa May that she is confident of a deal by Christmas, business leaders are highly sceptical, given the lack of progress being made and are worried at the looming challenges that are facing their businesses. Longstanding frustration is becoming real dismay. While some large companies with plentiful resources have been quietly making preparations and contingency plans, it is not so easy for smaller businesses. One fashion retailer commented that it is almost impossible to plan because whatever you do will be wrong.
For some businesses, stockpiling is the solution to overcome fears that there will be shortages of goods caused by gridlock at ports and a whole raft of new paperwork which clogs up the system. Many firms already operate “just in time” supply chains so there is very little slack in the system. If you are a small business that relies on imported goods, you should now start to consider what you can do to alleviate the potential problems. This might involve increasing stocks of your key components and goods but that inevitably brings cash flow pressure, so careful forecasting is required so see if additional funding is required. Larger stocks may require bigger premises and increased insurance cover.
Earlier this summer, the much publicised shortage of carbon dioxide demonstrated how easily shortages can impact all of us and that should act as a wake-up call. If you need to talk through how Brexit might affect the running of your business, please contact your Plus Accounting advisor without delay.
Author: Paul Feist, Director, Plus Accounting
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