Preparing your business for the impact of Brexit: a checklist

At the start of the year, almost 40% of SMEs revealed they felt unprepared for the potential opportunities and challenges posed by Brexit. Barclays’ industry experts highlight four key areas small and medium-sized business owners should think about as the end of the UK’s transition period to leaving the EU draws near.

The disruption caused by the coronavirus pandemic has meant the immediate priority for businesses this year has been working out how to operate in the ‘new normal’ – and many are still concerned about potential difficulties ahead. According to a survey from the Federation of Small Businesses, two-thirds of small firms are expecting an “incredibly difficult” trading period towards the end of the year.

As the UK’s transition period out of the EU ends on 31 December, planning for the impact of Brexit has become increasingly important – and Barclays has been backing SMEs through a range of initiatives including a three-year £14bn lending fund. We hear from the bank’s industry leaders about some of steps business owners should take to prepare.

3. Study your supply chain

Some SMEs assume that Brexit will not impact their trading says Ian Taylor, Regional Director for Business Banking at Barclays UK.

“The reason a high number of SMEs are claiming not to be trading with the EU is because their immediate supplier will be a UK-based supplier,” he explained. “A key consideration is to actually look two or three suppliers down the chain to see where an impact might come from. That's what we've been trying to encourage our clients, in the smaller retail and wholesale areas, to look at.”

Brexit may also have a more indirect impact in the agricultural sector. “Very few farming families and farming businesses will be trading with Europe directly themselves,” says Mark Suthern, Barclays’ National Head of Agriculture. “And so, when we talk about SMEs, what we've really got to remember is that as primary producers, they will be probably supplying into groups or distribution networks or agents who in turn will be supplying into Europe.”

Many businesses in the sector are unsure if they will be able to trade with the EU – the UK’s biggest agricultural trading partner – after the transition period ends. It's therefore crucial, he says, to maintain an awareness of the information about importing and exporting goods in the UK – and how these changes could have an impact on your business: “The degree of uncertainty for Brexit, with the agricultural sector is really around trade agreements about what will be imported, what tariffs will be and what we will be exporting.”

4. Get your SME online

The coronavirus crisis has accelerated ecommerce trends – and highlighted the need for retail and wholesale businesses to make the most of an online presence. This is likely to continue – and be crucial to business success – post-Brexit, says Karen Johnson, National Head of Retail, Wholesale and Healthcare at Barclays Corporate Banking.

“All our clients need to adapt to the way the consumers are now spending. That means technology and adaptation both in terms of developing ecommerce platforms and fulfilment processes.”

Taylor adds: “Within the SME market, we've now devised webinars and events around maximising a website. So if you’re an SME retailer or a wholesaler that wants to go direct to the consumer, it’s about maximising channels through Facebook and social media with your website and payment platforms with Barclaycard.”

As business clients consider how they can strengthen their offering once the transition period ends, Taylor encourages SME owners to make the most of the business support available from Barclays – from financial guidance to industry expertise.

“With our digital focus, we're able to have a positive influence on businesses, and provide them with the payment and IT channels to help them innovate.”