With Brexit around the corner, businesses are worried they may be in the dark come January 2021. There are echoes of fear that the lack of a deal between the UK and the EU may cause even more uncertainty to the uncertain fortunes of many. Will the UK face a “Blind Brexit” in which businesses are left in the dark, not knowing the implications of Britain severing ties with the European Union?
1. Uncertainty Cloud Over Businesses After Brexit
The UK’s departure from the EU is a Pandora’s box for business owners. Many have been left scratching their heads wondering what the future holds. With no certain path ahead, companies in Britain are grappling with a long list of questions and worries, including customs, trade and labour.
Brexit has generated a unique set of problems for those running organisations in the country. Notable among these are:
- Shifting regulations and standards that may disrupt supply chains;
- Uncertainty around access to talent and the availability of skilled workers;
- Unexpected tariffs and taxes on cross-border trading;
- Potential losses in established customer base; and
- A weakened pound, resulting in rising costs.
The prospect of facing such issues has many executives worried and has prompted calls for the government to provide greater clarity on the implications of Brexit. Businesses are eager for answers, hoping these will provide some assurance of sustainability and growth in the years ahead.
2. Will Blind Brexit Lead to Increased Business Vulnerability?
The Concern Of Vulnerability
The idea of a ‘blind Brexit’, or Britain leaving the European Union without a clear plan, has been discussed heavily in current politics. Beyond the more apparent topics of discussion such as immigration and the NHS, there needs to be the consideration of businesses acclimatising to the new regime. It could be a difficult process and could lead to increased business vulnerability.
With many of Britain’s companies rooted in the assured foundations of the European Union, the idea of branching out into a new environment could be coupled with new regulations, new guidelines and new taxes that could put many companies in a vulnerable position. Here are some areas in which businesses could be affected:
- Lacking Benefit Of Integration
- Disintegration Of Financial Systems
- Loss Of Incentives
The lacking integration between Britain and their former trading bloc could greatly decrease the effectiveness of the ability to trade across borders. With Brexit, companies may struggle with the requirement of extra documentation and the disruption of trade at customs offices. This puts Britain’s businesses in an awkward position, unable to gain the furthest reach and needing to consider revising their business plans.
The disintegration of financial systems makes investing in British companies an uncertain and volatile process. With the UK’s currency value continually changing and unpredictable, businesses can find themselves in a crunch when needing to raise capital. The volatility of the markets has crippled many companies since the announcement of Brexit, leaving their position weakened and more susceptible to losses.
The loss of incentives fostered by the EU can have a significant impact on British businesses, from government subsidies to feasibility studies, such incentives allow companies to make informed decisions that can affect the entire area of business. With the loss of said resources, businesses may find themselves in unfamiliar territory, left to decode regulations and legislation that could place them in a position of vulnerability.
3. Businesses Brace for More Uncertainty
The year 2020 has been a rollercoaster ride in terms of the business world. With the pandemic forcing lockdowns across the globe and making governments implement stringent control measures, it has been difficult for business owners to stay afloat and make ends meet.
Businesses across the world are bracing themselves for yet another hit of major uncertainty as the future of the pandemic and its effects remain hazy. Some major changes they need to prepare for include:
- Adapting to remote work: Businesses that earlier had a solid physical office presence are now having to prepare for scenarios of fully-remote teams and operations.
- Unexpected cash flow problems: With variable lockdowns and varying demand from customers, business owners have to learn to be more flexible in managing their expenses and cash flow.
- Upskilling staff: To stay relevant in such trying times, businesses are having to put in more effort in providing skill development and training opportunities to their employees.
- Looking for alternative markets: With many markets currently experiencing depressed demands, businesses are now turning to lesser explored geographical markets to stay afloat.
The coming few months are not going to be easy for businesses, but with the right strategies and the right strategies in place, they can weather the storm.
4. Preparing for the Worst-Case Scenario of Blind Brexit
As the clock ticks towards December 31, the UK’s future outside the European Union remains unclear. Although a trade deal has been secured on the 11th hour, there is still a chance of a “Blind Brexit”, where we leave without one.
In such a scenario, it is vital to be prepared. However, with the level of uncertainty, it is difficult to accurately predict just how our lives will be affected. Nevertheless, these are some of the areas that you should consider when planning for the worst-case scenario:
- Employment Rights: Regulations around maternity and paternity, holidays and sick pay, as well as data protection could all be altered following a Blind Brexit.
- Travel: As the UK’s immigration system changes, citizens from the EU may need to apply for visas in order to enter the country. Likewise, the same could apply for Britons wanting to travel to the EU.
- Supply Chains: Business owners should evaluate their supply chains and consider how a borderless trade relationship could disrupt their operations.
- Costs: Roll-on tariffs and taxes for goods being imported and exported could lead to higher costs for many companies.
These are just some of the areas that must be considered if Blind Brexit occurs. It is essential to ensure that you, your family, and your business are prepared for whatever may come on the horizon.
As the process of negotiations continues to drag, businesses continue to brace themselves with whatever uncertainty might follow, hoping that whatever the outcome, it will bring more stability and supported growth, rather than weakening the UK’s already precarious markets. Uncertainty reigns, and all businesses can do is wait and hope, for a brighter future.