What you need to know to prepare your business for Brexit

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As the 31st of October draws closer and the UK Government state that they will leave the EU, we are no closer to understanding if we have a ‘deal’, or ‘no deal’ scenario, leaving business owners unsure of how to prepare for Brexit.

Today on the podcast I want to ease your frustration from the lack of clarity and what feels like a lack of competency of those in charge and look at how we can take simple steps to ease the flow of our future cross border sales, regardless of whether you reside here in the UK, or in Europe, or somewhere else in the world entirely.


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I have created a handy checklist and resource designed to help you get started in your business transition for Brexit preparations – deal or no deal!

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Why you need to prepare for Brexit now – deal or no deal

Watch the video here;

Or listen to the podcast here;

The simple truth is that we don’t know what deal, if any we are likely to get here in the UK… in fact at this stage our Government can’t even agree as to what deal we will be pitching for! So, I completely understand why you don’t see the point in preparing anything at all. The reality is however, that there are several things we can do in order to create some action that will help us carry our businesses through whatever the deadline date brings us.

So, if you are in the UK, that’s preparing your;

  • Production

  • Shipping

  • Business insurance

  • Legalities

  • Finances

If you are in the EU and deal with the UK, then that’s preparing your;

  • Production

  • Shipping

  • Business insurance

If you are in the Rest of the World and deal with the UK, then that’s understanding your;

  • Production

  • Shipping

  • Business insurance too

 

I believe that by taking the time to understand and prepare for Brexit now we can ease any delays our businesses might endure during the transition. That will be super helpful for our customers and far less stressful for us as small business owners.

Let’s break down each of those points now, so that we can really get to grips with what we might need to do pre-Brexit.

How to prepare for Brexit now – deal or no deal

Here is the UK government’s get ready for Brexit questionnaire, which I recommend you take regardless of where you are in the world, because this will give you an idea of exactly how to prepare for Brexit in your business.

To make things much easier to understand I’m going to go through each business point I mentioned above and reference the UK government resource pages, so that you can understand what you may need to do in your specific situation before you take the Government quiz above, because, let’s face, it many of us will have different business models, that require different approaches.

*I guess I ought to state for the record at this stage, that I am not a Brexit expert (and I don’t think there is one out there just yet!), so please make sure that you back up any points you find here with full research.*

 

1) How to plan your production for Brexit (including importing from the EU to the UK)

Depending on your suppliers and where they are based, Brexit may cause problems in the flow of materials, or product lines during the transition period. My best advice is to list out your EU suppliers, or those whose products are EU origin manufactured and their details, so you have a clear list of who you need to contact for further information.

Remember at this point that they are as in the dark as you are about Brexit and so they might not have clear action plans yet. They might, however, give you some indication of what they are doing to prepare, whether that’s stock piling best-selling lines, or just lines with EU origin, or if they are applying for an EORI number in order to help customs processing for flow of goods to the UK post Brexit as a result of ‘no deal’. You in turn will need an EORI number and may need to register for simplified import procedures in a no deal Brexit.

Your suppliers may even be able to tell you if they anticipate price rises… yes, it is likely that closed borders to the UK will mean some price rises for UK and EU businesses, due to tariff changes (you can check government indications here). Whether prices will rise across the board to extend to the rest of the world in a bid to keep costs down may also be a consideration your supplier faces and so the question is worth asking.

There are certain things the UK Government are asking you to do if you are an importer of goods from the EU to the UK. These are;

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Gaining answers from your suppliers and from your Government will be helpful to understand how your production and product costings may be affected after Brexit happens and we move into the transition period, from which the UK will close its borders and sever ties with the EU. It may also highlight the need to source locally as a result of changes that may cause too many issues for your business.

Any changes or problems you foresee happening may be worth mentioning to your customers in a pre-Brexit newsletter, or on your website. This is not to worry them, but to show them that you are preparing for Brexit in a way that will serve them best.

The question of stockpiling – honestly, I can’t advise you on that. I have no idea whether you should or shouldn’t and how much. What I can say is that I think I would be tempted to stockpile on my better selling EU based lines, or materials… but only enough for an extra month’s supply.

If you are importing materials and products from the UK and you are outside the EU – It is worth checking with your Government department how to proceed. EU countries will require an EORI number, but I am not sure on the rest of the world (it may be that procedures remain the same in this case).

2) How to prepare your shipping processes for Brexit (export)

Shipping your products will be one of your main concerns when it comes to preparing for Brexit, because there are actually things you can do right now in order to make customs processes quicker during a transitional period, whether there is a deal or no deal.

Here is the full UK Government resource page on how to export to the EU post Brexit. I’ll be highlighting points from this for this part of our overview.

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  • Firstly you will need a EORI number if you are in the UK and we get a no deal Brexit – I applied recently for mine, so as to avoid any delay if we leave with a no deal scenario and it was a very quick process that took me about 10 minutes to apply and get approved for a number designation.

 
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To get this number you will also need to choose your Standard Industrial Classification (SIC) code designation from Companies House – Tip – if you have a product business that has one main product then choose a classification for that. If you have several different product lines that could be classified under one section code, but isn’t easily identifiable by a designated sub-code, then you might want to look at the codes with ‘N.E.C.’ after it. N.E.C. stands for ‘not elsewhere classified’.

If you are still struggling for classification codes then you will need to contact Trading Standards.

Special note if you are in the EU or Rest of the World and shipping into the UK - it is worth checking with your Government department how to proceed. If we get a ‘no deal’ departure EU countries will require an EORI number for importing from the UK, as mentioned previously for importing (in this case exporting from the UK to the EU), but I am not sure on the rest of the world (it may be that procedures remain the same in this case).

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  • A note about customs forms – From what I understand regardless of a deal, or a no deal situation Royal Mail are advising that we all use either CN22, or CN23 customs forms on all our overseas parcels here in the UK, just as we were using them for countries outside the EU before Brexit. Here is some further Royal Mail Brexit information for businesses which I think you need to read.

  • Update your shipping policy – If you have been following the last few podcast episodes, where I talked about ‘How to write your shipping policy’ and ‘International shipping’, then you will have a head start on website policies for your customers. These will need to be updated as and when you get further into Brexit changes.

  • Shipping prices – Will shipping prices change? There is no official news yet, so my advice is to keep checking with your carriers.

  • Keep customers notified – Use your website, newsletter and social media to keep your customers in the loop with exactly how you are preparing for Brexit and what this means for them. Passing on information about changes and possible delays is not only courtesy, but also shows your willingness to make their lives easier during the transition and shopping with you.

 

3) The considerations you need to make for your business insurance

Currently if you ship outside of the UK and trade within it, then you pay an extra insurance fee depending on where your business ships to. Some costs are quite staggering if you ship as far as the US from the UK, with business insurance costs rising by sometimes £300-600 for craft businesses.

I recently spoke with a sales representative from Simply Business* who help me with my insurances. Whilst they could not advise on insurance changes the representative was willing to state that you should be in touch with your insurance company to be clear about how Brexit may change your policy remit and cost (deal or no deal). In most cases I should imagine insurers are preparing their businesses and products for changes and will be in touch with you closer to the time.

Likewise, if you are in the EU, I would expect you to anticipate possible changes too as a result of a ‘no deal’ Brexit. Insurances to specifically ask about are; product and public liability.

 

4) What considerations you need to make for your business legalities

Over the course of the UK’s membership to the EU, several laws have come into play that may be affected by its leaving. With this in mind here is a list of the laws I have found information on that you may wish to research further;

If you have had to pass a product you manufacture through other EU standards and you are based in the UK, you will need to remain compliant if you wish to export to Europe. Whilst I’m not clear on if that will change if you only serve the UK with your products, I strongly suspect that our government will continue to adopt these standards, or laws. My best advice is to contact Trading Standards for clarification.

 

5) What considerations you need to make for your business finances

Whilst I have not heard news that VAT Moss (the charging of VAT on digital goods by EU countries) will be affected, it might be worth keeping an eye on Government websites on the lead up to Brexit. Personally, I imagine the UK will adopt this law into their own, post Brexit, because it serves a VAT collection purpose for the Government and was created to enforce correct tax reporting for those larger companies who were found wanting, some time back.

Other financial concerns we may have post Brexit are probably tied up in costs, from; suppliers, or carriers as a result of border changes.

Currency fluctuations are also a concern for UK businesses during the transition period. It will take a while for our £GBP to stabilise after the 31st of October. This may affect incomes you receive, or payments you send in foreign currencies, so take a note of exchange rates. Having said this, it is worth noting that if the £GBP falls then there is opportunity to gain more overseas sales as our products appear less expensive after currency conversions – so make sure you do some overseas marketing!

 

Resources for Brexit information;

 

Takeaway

We are not crystal clear yet on what Brexit may throw at us during the transition period, but there are certainly things we can do to prepare for it as small business owners, as of today. I hope that in putting this resource together you have been given enough of a head start in figuring out your specific plan of attack!

If you’d like a little more help, then download my free checklist 👆 and subscribe to the Handmade Business Podcast newsletter where I will try to keep you updated as and when Brexit happens.

 

Tell me; How do you feel Brexit will most affect your craft business?

I’d love to hear from you – comment below 👇 or email me!


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