The UK has voted to leave the EU. David Cameron is expected to evoke Article 50 of the EU next week which effectively starts the legal, political and financial divorce process. This is expected to take around 2 years.
This will inevitably mean there is a period of uncertainty (sterling and the stock markets have already tumbled) so it is vital you assess the risks to your business as a matter of urgency. There will of course also be opportunities that need to be explored. Here are some of the things you will need to consider – feel free to let us know if you think we’ve missed any:
1. There are likely to be significant currency fluctuations over the course of the next few weeks in particular which will affect you if you import, export or hold assets (or liabilities) abroad. You should ensure you have strategies in place to protect yourself against currency fluctuation.
2. If you trade with Europe the rules, regulations and tariffs are likely to change so it is vital you assess the impact this will have on your business as soon as possible. Admittedly this is difficult until we know what deals we agree.
3. If your business relies on low skilled EU workers they may be less freely available in the future. There is also uncertainty about the rights of those workers that are already here to stay. Alternative sources of employees may be needed.
4. The markets do not like uncertainty so there may be an economic downturn in the short term which may make sourcing funding more difficult and expensive (UK has lost its AAA rating status). It is therefore sensible to review your funding requirements at the earliest opportunity and give yourself plenty of time to research the different alternatives.
5. There is a danger the media will talk us into another recession which will inevitably mean business failures. Credit checking your major customers and maintaining watertight credit control processes is even more crucial during a downturn.
6. Being outside of the EU will give the UK the opportunity to create our own trade deals so now is a perfect time to explore new markets for your business.
If you wish to discuss any of these matters with us please do not hesitate to get in touch.
