Bobby Lane, a partner at accountancy firm Shelley Stock Hutter, looks at the bright side of Brexit
The first thing that most people do in the morning is check their social media feeds.
On June 24 last year, I did just that and witnessed a sea of negativity. One friend even cancelled a holiday for fear that his business would suffer dramatically as a result of the vote.
The only post I made on that day was “with risks come great opportunities”.
Almost 9 months on, I still stand by that comment.
In the aftermath of the vote, many of my clients were panicking about what the future looked like for them.
In all of those conversations I identified five key areas that they should focus on in both the short term and longer term.
1. Competitive Edge
UK businesses have always been valued for the quality of their skills, products and experience. Many international companies have requested proposals, pitch documents and costings over the years but domestic companies have sometimes lost out on the basis of cost.
Post Brexit-vote, sterling has devalued significantly, making the costs of the same proposals for an international business 15 – 20% cheaper than previously.
Those potential customers will still want to buy the skills, experience and products so UK businesses should now be able to compete on price.
2. New Revenue Streams
Now is the time to look at new revenue streams or markets that may not have previously been on the radar.
If you are a manufacturer or a creative business your products or services, as discussed above, will now be more competitive. Businesses should now be looking to export.
Every Government has focused a lot of effort on assisting UK businesses in developing international trade and export markets.
UKTI, replaced in July 2016 by the Department for International Trade, has been hugely beneficial to many businesses looking to expand abroad. Additionally, some banks, such as Lloyds, have developed their International Trade Portal for customers, which is an incredible tool that helps businesses of all sizes do their research.
Currently, we are able to trade freely within the EU and the early indications are that the US would like to negotiate a beneficial trade deal with the UK in the future. So take advantage of the opportunities as they arise and move quickly. Agreeing contracts now will allow for currency hedging and securing longer terms than those which may have previously been on offer.
3. More likely to be an Acquisition Target
There is a lot of international money available at the moment for investments into good businesses.
An acquisition target that an international investor may have previously been assessing is currently less expensive than it was this time last year.
4. New Suppliers
We would all like to have a crystal ball that will tell us when, how and what type of deal will be done with international trading partners. Fast forward a couple of years and assume that in an ideal world free trade deals are negotiated with other countries outside of the EU.
Using an example of a clothing importer working with US brands and paying 12% duty on imports, a free trade deal will mean that margins will increase, but more importantly, it will open up new markets to supply into the UK that may well have been cost prohibitive in the pre-Brexit world.
It is clearly worth looking into potential suppliers that may have not have previously worked for the business for cost, location or a whole host of other reasons.
As with acquisitions, there are a lot of international investors looking to invest in thriving businesses.
If you have been looking for investment now is the time to widen your search. Your business is now far more attractive as an investment at the current exchange rate than it was pre-Brexit.
The key to all of this is to take advantage of the opportunities as they arise. We are in uncharted waters and things will move very quickly. Don’t miss the boat, prepare your business plan, identify the opportunities and take advantage of them.
Bobby Lane, is a partner at accountancy firm Shelley Stock Hutter, with over 20 years of experience in professional practice.