12 Jul VIDEO: Brexit and business uncertainty: How to protect your company
In the wake of the Brexit referendum result and the business uncertainty that has arisen, find out what Pay4’s Risk Director Tim Marshall has to say about how SMEs can protect themselves from the potential risks, and make the most of any opportunities that may arise.
We have witnessed some extreme economic and political turbulence in the couple of weeks since the Brexit vote occurred . There have been large fluctuations in exchange rates and shockwaves have been felt across global markets.
The shock of the referendum result has thrown up a great deal of uncertainty for many UK businesses. The SME population is perhaps at most risk of any current and potential fluctuations or economic downturns. Markets in general tend to thrive on certainty, so this period may well present significant problems for the UK’s SME population, one that currently accounts for 99.9% of all UK private sector business and 47% of private sector turnover. This business uncertainty may well manifest in investment delays as well as declines in purchasing and projects being put on hold.
International trading may also be affected thanks to alterations in trade laws and agreements between the UK and Europe. A 2015 Western Union Business Solutions’ International Trade Monitor Report showed 80% of UK SMEs that did export did so within Europe.
Yet there is also the potential for opportunities. Investment, wider exporting, new partnerships and competitive advancement are all possible. Exchange rate fluctuations since the result have given the UK good export opportunities, with the price of selling abroad dropping. Perhaps now is the time to look into exploring new markets and diversifying that concentration risk.
SMEs need to be well prepared to improve their chances of success in these turbulent times, . They need a well-formulated plan, strong cash flow, optimised stock levels, a robust and diverse supply chain and the working capital to seize upon any opportunities that may arise. As well as communicating with customers and suppliers, incorporating the right financial arrangements into your strategy is crucial to being able to ride out the storm and push on to further success.
Discover how Pay4’s pre-approved revolving credit facility can help your business retain the working capital needed to maximize opportunity and secure sustainable growth.