Why we're not panicking about BREXIT

I read 12 LinkedIn articles on BREXIT this morning, mostly billed ‘practical tips for exporters’ or similar. I’m always surprised though at the lack of practical advice, and that instead they focus on how little clarity we have on a BREXIT deal.

A number of recent discussion panels on ‘BREXIT and Small Business’ have also been dominated with quotes like “we should probably start looking further afield than the UK (or Europe)”.

I can’t help but feel that so may of the conversations about BREXIT are focused on the wrong things.

The international community is laughing at us. Droning on about the government not giving us clarity and second referendums. Surely we can all remember how negotiations work?

What businesses need are orders. They need the knowledge that their overseas orders will continue to be sustainable. They need the confidence to go and win more orders from new territories and explore new overseas opportunities.

With that in mind, here are a few actual practical suggestions for business people who would like to focus on winning orders and making money. 

1.    Trade Tariffs

We don’t yet know what’s going to happen with trade tariffs, but that doesn’t mean we should do nothing. Look at the ‘worst case’ scenario. A so-called ‘Hard BREXIT’ could see the UK defaulting to World Trade Organisation tariffs. I think it unlikely that this is where we’ll end up, but re-negotiated trade deals could take time and without a transition agreement there may well be a gap.

TIP: Look at your business. The last 12 months, your forecasts and your business plans. Do the maths. Work out what difference WTO rules would have made and forecast what difference they might make. It might be frightening, or it might make no difference at all. Hope for the best, plan for the worst.

TIP: The worst case, it seems, is that in some areas you might experience a 2-3% increase in tariffs. It’s not ideal, but as SME manufacturers we shouldn’t be panicking about it. If that percentage is a killer for export orders, Brexit is not high on the list of your problems. We’ve regularly increased prices by up to 5% annually while sustaining growth.

2.    Its not just about the EU

It’s not only trade tariffs with the EU that might be affected. Remember that many of our trade agreements with countries outside the EU are agreements negotiated by and signed with the EU. That means that post Brexit we’ll likely need to re-negotiate with all of them, perhaps with a period under WTO rules. Again however, I’d like to think that a transition period will make all of this smoother.

TIP: Same as above. Do the maths. Work it out and plan using real information.

3.    UK Supply chain

The changing trade tariffs won’t just affect exports, they’ll affect imports too. I often hear that “we buy from the UK so it won’t affect us”. Not so. We don’t make much in the way of componentry in the UK now, and the chances are your UK suppliers are selling products manufactured overseas. I suspect that the price of imported goods will go up, even if for a short time while businesses panic about the unknown.

TIP: Talk to your suppliers. Look at where your major components are sourced. Do the maths. Look for alternatives. Buy them directly from overseas – it might seem counterintuitive but you’ll remove the UK panic percentage, and in my experience get lower prices, quicker delivery and better service. Use WTO tariffs as a worst-case scenario.

4.    Europe will be more competitive than us 

I couldn’t disagree more. This is based on the incorrect assumption that it’s all about price. It isn’t. In fact, if you’re fighting on price overseas your strategy probably needs reviewing. We’re British. We’re known globally as producing the highest quality products in the world and the “British” badge still carries more weight than any of our European counterparts, even Germany. The big difference is that the Germans, French and others in the EU are very good at getting down to business - together. I’ve seen so many competitors in different sectors in Germany work together, to win business overseas. On the whole, we Brits prefer to squabble with our competitors and fight for the small tenders. At least that’s my observation.

TIP: Take your egos out of it and go and win the business. Work with your competitors to offer complete solutions and collaborate strategically. Focus on the bigger picture and use our reputation for quality and service to win at higher prices.

5.    The laughing stock

In my opinion, managing perception will be the biggest challenge that we face. The constant disagreement in government, in business, in the press and online is making us look like the world’s jokers. My 1,000s of contacts overseas are constantly asking me how people in the UK can be so intent on bickering, rather than making things work for the better.

TIP: Play your part and stop panicking. Talk positively and find solutions. Don’t engage in baseless social media arguments about unverified facts and don’t get wound up with politicians when they say something contrary to your ideas (chances are they probably have more solid information than you anyway…).

TIP: Instead, ensure your overseas partners know that you are in business and you will be for years to come. Make them realise that Brexit or no Brexit, you’ll be selling superb quality, British manufactured products at prices that offer great value.

6.    What else might change?

Until the details have been negotiated, we can only really consider best and worst case scenarios. What will happen to freedom of movement is unknown. A “Hard BREXIT” could mean that customs checks are put in place for goods coming from the EU. If so, it might take a bit longer for our goods to arrive while the UK scales up its customs operation. It seems unlikely that this is where we’ll be, but plan your purchasing accordingly and don’t leave it to the day before. You might suffer with longer than 24-hour Amazon deliveries too, so get planning those birthday presents a bit earlier!

Whatever happens, my thoughts are clear. There are lots of small businesses pushing hard to achieve growth in export markets, and so they should. Brexit won’t be the end of international trade, it will be a mere blip on the road ahead.

Don’t use Brexit as a reason to avoid international trade or as a catalyst to look for business outside the EU. Get out there and do it because you’ll win more orders, achieve sustainable growth and make more money.

♯Brexit ♯export ♯doingitright ♯growth ♯Britishisbest ♯ ♯ukexportsupport