Brexit Blues And Impacts on Businesses in the UK
Well, we still haven’t left and I am not surprised at all.
I am not going into what we already know about Brexit as there is enough news on that point every day, but I will give you my opinion.
The whole process is a farce and on the one side we have what is called a ‘democratic’ vote that showed we should leave the EU and therefore as it was the vote of the people, it must be actioned.
Three years down the line and we still haven’t left, despite passing the ‘deadline.’
I don’t believe that we were given the true facts at the time of the vote, especially with the money that was promised to the NHS and the all too emotive issues concerning immigration, plus a whole lot more.
For what it’s worth, I now support a second referendum and before anyone goes crazy and says “we have already voted,” I will simply explain what I have explained above, adding that we have made no progress in the last three years and people are tired of the uncertainty and what is all fuss about anyway?
If you are resolute in your beliefs and still feel that we should leave, then you will simply vote ‘leave,’ just as you did in the first place. If you voted remain, then the same applies and if you are uncertain, or voted in haste then you have another chance to vote again – the process of a democratic vote holds, but let’s please focus on factual information.
A vote should be conducted on the hard facts and not hype on either side.
As I lived in the US for ten years, I was amazed at the lack of knowledge most Americans had about our culture here in Europe, but that was starting to change and for those interested, here is a perspective from the news channel CNN, after the latest European Elections.
To Business the impact of Brexit
But what are the generic consequences to a ‘no deal’ Brexit?
A no deal Brexit is, of course, a real possibility – and this article here from BBC news lists 10 of them!
It pretty much covers everything and I am talking about the rising costs of food, travel through Europe to pensions, etc. and whatever your views, you have to take into account that all of this is a real possibility.
Here is another article by Dermot Campbell, CEO of Kuber Ventures, talking about the companies that could thrive in a post-Brexit Britain.
He begins the article by talking about the fear that anyone who was around at the time experienced as the year 2000 was approaching. Computers were all set to go into a meltdown and place the world into chaos. I remember New Year’s Eve very well at the time, as with a group of friends, I refused to pay the huge premiums that were being charged by most restaurants and bars in London at the time and Midnight came, went and when I called my Malaysian Chinese friend, business consultant and Chartered accountant to wish him a Happy New Year, we ended up in a two hour debate concerning the history and future of China!
Now let’s talk about getting through this period as far as business goes.
Remember this phrase – “tough times don’t last, but tough people do.”
And now take into account something that I have learned throughout my entrepreneurial life and business career – in times of uncertainty, many opportunities are created.
This economy is probably the most uncertain and volatile economies in history – starting, owning and keeping a business has never been more challenging and you only have to look at the high street to see casualties and also the statistics relating to business casualties as far as start-ups and business survival over a five-year period, for example.
As I will explain a little later, the USA drives the world economy and here is an interesting article talking about the challenges faced by small businesses in the US this year and you should use this information as a starting point to try to predict how things will roll out in the UK in a ‘predictive’ sense.
Finally, just look at the cycle of credit and how it’s expanding.
But enough of that and now let’s take a look at what you can do to protect what you have as best you can.
Audit Yourself And Your Company
So if you haven’t done so as of now, do a complete overhaul of your business, the message, strategy and how it operates. Start with your customers and make sure you understand everything about them, especially their commercial commitments or ‘deliverables.’
Then work through each of your processes and make sure they are customer-centric.
You should be constantly analyzing your industry and the economy in general and learn to think like a hedge fund manager – you must be able to predict confidently, where your industry will be in the next six months for example and adjust your services accordingly and don’t do what I did in the late ’90s, when I believed the technology industry was on a continuous bull run, when the reality of 2001 suddenly forced me to understand that it was definitely over!
The same applies if you are starting a business and the research or overhaul phase is essential and it drives the rest.
To give you a feel for the job of a hedge fund manager, take a look at this article outlining a typical day of such a person!
It is not a day for the faint-hearted!
Go On The Attack With A Strong Defence
The two most important factors in any business are sales and cash flow and in my global employment agency business, I was exposed to many factors that could dramatically affect my business that I had no control over.
I was dealing in Europe extensively and in the pre-Euro days, so I am well aware of uncertainty and in the period before the Euro was formally adopted, there was much uncertainty – not just from the currency point of view, but now the entire European trading landscape as customer contracts were being re-negotiated hastily and new trading guidelines were being discussed and set.
My attitude was simple and I had to look at sales and cash flow with two simple objectives
Was my product ‘critical’ from the perspective of my customers and in some cases, it was a big fat “yes,” simply because I was able to locate in-demand talent for a growing and global industry very quickly and efficiently.
In other cases it was the exact opposite and here is where I believed I was exposed.
As far as cash flow is concerned, what were the implications to my business in terms of currency and a change of legislation?
If you are a vital component to your customers success, they will jump through hoops to keep you happy as a supplier – even though many will not admit it to you, because they don’t want you to get complacent, but if you know your industry, customer and the marketplace well enough, you don’t need their gratification.
If you are not, then it may only be a matter of time before they replace you with another supplier.
Move Up The Value Chain
In any event, the best course of action with your customers is to make sure you are constantly selling and marketing your products at the very highest level.
For me, it was the C/executive leadership Layer as they were the key policy and decision makers.
As you move up the value chain, you will learn that it is far more important to learn how your customers ‘buy,’ than to earn the latest sales pitch or ‘close.’ This is an old article, but it gives a great overview and insight.
My competitors would always beat me to the managerial layer, where they would always boast of doing deals ‘where the deals are done.’ That was great for me as I always play the long game and when many of those managers would leave or change roles, the new incoming replacements would often bring their own suppliers in.
So in this time of uncertainty as far as sales are concerned, make sure your products and/or services are as far up the ‘critical’ list as possible and even look at creating new ones and then make sure you shout and scream about them to the right people.
On the subject of sales at this level, I will caution you to make sure you can clearly articulate the value of what you are doing and that value must have a clear benefit to your customers and where appropriate, their customers.
Making Sure Your Cash Flows
Here you absolutely must seek specialist advice as there could be many implications and some of the obvious will be around legislation, as far as importing/exporting goods and services as well as the possibility of withholding tax issues, where the country you are trading with may impose an amount of tax that is deducted from each invoice payable.
For example in my case back in the day, there were many countries that would take off as much as 30% of each invoice payable and although in some cases because of taxation agreements, the amount was re-claimable back in the UK in my case, the process was long and difficult, despite having excellent advice.
My cash flow would suffer heavily and in some cases, I was forced to move operations or set up a company to operate in that country, which for me looking back now, created many headaches.
If you are importing/exporting goods from/to the EU countries, then you have to consider the potential of increased duties and the fact that the process will simply take longer.
You also have the issue of moving people freely between countries to perform work and services and of course, this applied to me specifically in my staffing business.
The key here is to take a long and deep look at your cash flows and restructure them accordingly. We do know (as much as we can in these circumstances), that there will be some form of a transition period and this will obviously help to a degree.
Perhaps the best advice I can give all round is to prepare for the absolute worst and take as much action as you can right now to avoid what could be inevitable.
I want to touch a very tough subject as far as businesses are concerned and that is insolvency.
This is a specialist subject but one that I have faced in my career and many businesses will no doubt experience in the future as the number of insolvencies in the UK are increasing. This article in the Guardian talks about the number of companies going into administration, which is a phase in the insolvency process. I don’t want to be negative here, just a realist – you need to look at everything as far as business is concerned.
I know this sounds dramatic, drastic and could be harsh, but take it from me that I wished I had taken some very drastic action in my business career looking back and if I had followed my own advice here, I would have saved an absolute fortune and a lot of unnecessary work, but at that time, I didn’t know what I know now!
Finally how to beat the Brexit Blues…
Any business coach or consultant can tell you what to do in terms of the obvious, but few can be bold, creative and disruptive in times of uncertainty such as these.
More importantly, a good business coach must always take a holistic approach to your business and the best ones have also been through their version of ‘hell’ and come out on the other side – nothing beats experience and the expertise gained from it.
For me, business is purely about looking for opportunities to thrive in any economy and over the years I have learned to create, rather than compete, to research my industry and market deeply, so that I can work proactively with customers rather than be in the rat race and finally to be able to change direction in a heartbeat.
I will leave you with a story on that one – I opened a New York style Deli with a partner in London and we had done the research in New York. I was (stupidly) away on business in the US on our opening day, where we walked around the local town with samples of our hot beef and chicken sandwiches.
Unfortunately, nobody had checked the bread, which was stale!
Within weeks, we had converted it into an Italian restaurant selling affordable fixed price lunches and dinners.
You cannot ever sit still in times of success or uncertainty – you must always evolve and of course, never quit!