By Mark Turner, Managing Partner
Envisaging the future outside of the European Union, our clients certainly face a range of uncertainties.Whilst the brouhaha has now died down a little, Brexit’s effect on business is still far from clear.
Whatever we may think individually about the result, it is certain is that in the wake of the referendum, as well as inevitable difficulties, many interesting prospects are likely to present themselves.
For our overseas clients, the fall in the value of the pound will present a range of opportunities to buy into the UK at what is now, effectively, a huge discount as compared to pre-Brexit prices. Conversely, those overseas clients with investments and businesses in the UK may be worrying about their residence status in the country, and therefore whether they should they stop investing - at least until there is more clarity about the future.
For UK clients in the export business or those who rely on overseas customers, the fall in the pound may well provide great opportunities for increasing sales and exports abroad.
In this unprecedented situation, it might be helpful for businesses to prepare a risk
management or businesses continuity plan.
If predominantly good or bad things might arise for your business as a result of us leaving the EU, identifying the assets and functions that need protecting from the worst of the impact would be a wise move at this stage. Investigating the solutions for ensuring your businesses will not be unduly affected, and the nature of any inherent risks, might also be expedient now.
Whilst avoiding decision making tends to be bad for business in general, until the Government has at least outlined its plan and taken some major decisions, decision avoidance is probably inescapable. As none of us has any idea of what is likely to happen or when planning for increased interest rates, decreased interest rates or for boom or bust just isn’t possible. What is possible however is to plan to be ready for the future. Having a flexible structure so as to be able to take advantage to any opportunities when they do present themselves will help mitigate the effect of any business and economic shocks.
We are well placed to help our clients review their businesses to protect them from post-referendum unpredictability. There are a range of exercises that could be undertaken now such as revisions to forecasts and projections, reviewing management figures, considering the exchange rate difference and the impact on markets and imports/exports.
With the dramatic fall in the pound, it’s hard for some businesses not to be pessimistic
especially where they rely on imported products. But by staying positive it should be possible to recognise any opportunities emerging from the fray. As the future becomes clearer, we envisage that clients will want to discuss what changes might benefit them and their businesses. This may include looking at different trade relationships, opening up other international markets and adjusting prices, fees, forecasts etc.
We now know who the Prime Minister is but it’s not wholly clear whether there will be a snap General Election. All of the uncertainty leads to a sense of unease for everyone. There are many different ways our negotiations could go with the ideal outcome including continued access to the Single Market but of course, this will be unpalatable to the EU unless a compromise on the free movement of people can be reached.
Finally, we are presently in a state of flux, currently still EU members but clearly heading out or, at the very least, with a radical change in our relationship ahead.
If you would like to discuss any aspect of your business and how Brexit might affect it, please speak to your contact partner.