Truthfully, no one knows what trading conditions will be like once we exit the EU. Will supply chains seize up or will it be business as usual?
If there is a possibility, however remote, that the commercial landscape will change, doesn’t it make sense to undertake an assessment of any downside risks and plan accordingly?
From a Brexit point of view, supply chain concerns are likely to cause the most disruption, at least initially. Even if your business does not buy or sell goods to the EU, many of your customers and suppliers may, and this could affect your sales and purchases of goods if transport links are affected.
Accordingly, we recommend that you undertake a basic supply chain risk assessment. For example:
- If you sell goods to EU concerns could you encourage them to increase their stocks of your goods before 29 March 2019?
- If you buy goods from the EU, could you increase your stocks prior to the same date?
If we head for a no-deal Brexit, and you import goods, what effects will import VAT and other duties have on your margins and cash flow?
And if your suppliers or customers have similar concerns, will you be under pressure to reduce your selling prices to customers or find alternative suppliers in the UK?
Until we are certain which way the no-deal or negotiated separation will pan out, we should be planning for all options. Whilst this may seem to be over-the-top at present, come spring 2019, you will be grateful that you are ready for any disruption whatever shape it may be.