We live in uncertain times, as I’m sure most politicians would agree.
Probably the greatest uncertainty playing on the minds of many business people I’ve been speaking to is Brexit.
We don’t know what form it will take. Will it be hard? Will it be soft? What of the Single Market? The Customs Union? The free movement of people? The connotations and permutations are bewildering. But one thing is certain. Whatever the deal – good, bad or no deal at all – we will be leaving the EU in 16 short months from now.
Many people have been asking me how Brexit might impact their business and, of course, the answer is that none of us really know. The best advice I can give at this stage is to take a good look at the potential areas of risk in your business and run an audit process on them.
At Business Doctors we call it the S.T.E.P. analysis and we encourage our clients to undertake one regularly. S.T.E.P stands for Social, Technological, Economic and Political. In other words, the external factors that may impact your business over which you have no, or very little, control.
If we were to do a S.T.E.P analysis on the impacts of Brexit on a small to medium sized business it will begin to raise some important questions:
What are the possible social impacts of Brexit? For example, if a high proportion of your staff are from Europe they are probably feeling rather uncertain about their future. Similarly if a lot of your customers are Europeans living in the UK.
The EU provides a wide range of grants to help fund technology innovation. What might be the impact of their withdrawal? If you’re in the tech sector how can you prepare for that?
What proportion of your business is dependent on the EU? Perhaps you export your goods or services to EU countries or you have a large number of European suppliers. If the proportion of either is over 15%, then you may have an over-dependency. Of course not every risk factor is negative. For example, the value of sterling in the international markets means that there’s no better time to be an exporter.
This comes back to the deal (or lack of it) that our politicians will negotiate on our behalf, but also the legislative changes that may occur over the coming years as a result of Brexit. Will there be new trade deals opening up with other lucrative markets? The USA for instance?
Of course this is just an example. Every businesses S.T.E.P analysis will be unique to them and will throw up a wide range of risks and opportunities as well. None of us can control the factors at play but we can at least begin to identify the possible risks and start taking steps to future-proof our business.
A final word of caution: don’t wait until the last minute to start your audit. If you find that you do need to make some adjustments to your business you’ll need to give yourself as much time as possible to implement them in a structured and effective way.
Of course, Business Doctors are here to provide advice and support every step of the way. If you would like a free consultation, please get in touch.
A week may be a long time in politics but 16 months can be no time at all in business.