Close up of strawberries in wooden crates.


Preparing your business for the impact of Brexit: a checklist

09 December 2020

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.

All our clients need to adapt to the way the consumers are now spending

Karen Johnson,

National Head of Retail, Wholesale and Healthcare at Barclays Corporate Banking

Headshot of Barclays’ Karen Johnson.

Karen Johnson is National Head of Retail, Wholesale and Healthcare at Barclays Corporate Banking.

1. Consider unexpected impacts

It’s crucial for businesses to think beyond the immediate direct impact of Brexit – and companies shouldn’t assume that they won’t be affected because they don’t trade overseas. Factors such as levels of employment, the cost of supplies and the wider economic landscape could all be affected by the end of the Transition period – and, in turn, have consequences for how your business operates.

“The impact of Brexit is not clear cut for real estate clients,” says John Ainsworth, National Head of Real Estate at Barclays Business Banking. “Obviously you’ve got wider ramifications of Brexit in terms of what it does to the economy – alongside the current impact of coronavirus.

“Commercial landlords need to think about whether their tenant base, and the businesses that they are employed by, could potentially be exposed to the impact of Brexit. In a similar vein, residential investors should be looking at whether these local dynamics affect employment and therefore household income and ability to pay rent.

“Meanwhile, the impact on developers will probably be around the ability to source labour and therefore possible price increases on wage bills and material prices. It is likely that this will create geographical and property type sensitivities which could impact on valuations and prices.”

2. Protect your workforce

The end of the transition period could have an impact on the UK’s existing labour shortage ­­and skills gap – making finding new talent more difficult for businesses who have previously recruited from Europe.

“The biggest impact for the type of operators that we look after is staffing, given the end of free movement,” explains Tony Reynolds, Head of Public Sector and Health at Barclays Business Banking, discussing the challenges facing healthcare businesses. “Traditionally, a lot of staff have come from eastern Europe and have provided a vital chain of experienced people.”

This could also be a challenge for early-stage companies who rely on a pipeline of talent to scale up. “Access to talent or skills is a challenge for any business that's growing,” says Richard Heggie, Head of High Growth and Entrepreneurs Proposition at Barclays. “But the greater the availability of labour and the more access to talent and skills that businesses have the better – it can only serve the UK well. Hopefully people are thinking about that right now.”

Staff retention should therefore be a priority for businesses, particularly in sectors where staff turnover can be high, adds Steve Fergus, Head of Healthcare at Barclays Corporate Banking. He says that this has been a focus for larger businesses over the past three years: “I think a lot of companies have got a lot more focused on staff retention because they know the pool of people from which they can select from is going to reduce.”

Businesses can protect themselves by ensuring that they are familiar with the new points-based immigration system and the EU Settlement scheme.

Headshot of Barclays’ Mark Suthern.

Mark Suthern is National Head of Agriculture at Barclays.

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

Mark Suthern

Barclays’ National Head of Agriculture

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.”

Planning for Brexit and beyond

If you’re unsure about how to prepare your business for the end of the Brexit transition period, Barclays can help. The bank’s virtual Brexit and beyond clinics provide practical guidance to help businesses across the UK get ready for the upcoming changes. 

Barclays’ Brexit checklist helps businesses to prepare for any potential changes ahead of the end of the transition period to leaving the EU. The checklist outlines five key areas to consider:

  1. Trading abroad
  2. Finance and investment
  3. Regulation of goods and services
  4. Access to skills and talent
  5. Data and cyber security