By a David Prosser
The clock is ticking just a little bit faster with the increasing likelihood that Boris Johnson will win the Conservative Party leadership and become Prime Minister in four weeks’ time. While Johnson insists he doesn’t want the UK to crash out of the European Union without a withdrawal agreement in place, he’s also adamant that Brexit will happen on schedule on 31 October even if no deal has been signed.
With EU officials refusing to countenance any renegotiation of the agreement previously signed off with Theresa May – and time running short for such discussions ever it were to be prepared to have them – no deal now seems more likely than at any time since the referendum. The crisis may yet be averted: either the UK or the EU may blink, the House of Commons may intercede to prevent no deal, or Johnson may prove more pragmatic in office. It’s even possible that Jeremy Hunt, the outsider in the Conservative race, will pull off a surprise victory; his commitment to withdrawing without a deal is less trenchant.
Untied? The likelihood of a no-deal Brexit is increasing GETTY
Still, businesses that are not making preparations for a no deal exit are taking a big gamble – and it appears there are very large numbers of them. Bank of England Governor Mark Carney said this week that as many as 150,000 firms in the UK do not have the paperwork they would need to continue trading with partners in the EU in the event of a no-deal Brexit.
So what should small and medium-sized enterprises be doing to get ready? Here are five simple steps you should consider taking:
Double- and triple-check likely regulatory changes
Your first challenge is to assess your vulnerabilities. In particular, will you still be able to sell your services and goods in the EU without a deal, or source services and goods from the bloc? If not, check the Government’s guidance on what you can do to solve this problem – if you act now, it’s likely that you’ll be able to reduce disruption.
Consider setting up an EU company
An EU company will allow you to maintain a presence in the bloc, easing trade and other stumbling blocks. Moreover, it doesn’t have to be troublesome or expensive. Many businesses are looking at Ireland, which will be the largest English-speaking country within the EU post-Brexit. Before taking any firm decisions, take legal advice on whether your plans will achieve the desired result, and think about how they will affect the rest of your business.
Open a bank account in the EU
Having a bank account in the EU is likely to prove very useful following Brexit, but if you leave it until after a no deal departure, the process of opening the account may be more complicated. It makes sense to do this now.
Apply for an importer reference number
Technically speaking, when UK businesses buy and sell goods in the EU today, they’re not actually importing or exporting, since the Customs Union means there are no trade borders with countries in the bloc. That won’t be true after Brexit, so you’ll need an importer reference number to continue trading – this is known as an Economic Operator Registration and Identification (EORI) number. Apply to HM Revenue & Customs now to get this sorted.
Assess your workforce needs
If your business employs lots of EU workers and you’re expecting a significant number to leave in the event of no deal, think about how you will deal with the shortages that result. Take steps now to begin recruitment – you may need to think more imaginatively about sourcing talent. Consider apprenticeship schemes, for example.
David Prosser Contributor
I’ve been a financial journalist for more than 20 years: I’ve written for most of the national newspapers in the UK (plus a host of magazines and web sites) on topics related to business, economics, finance, property, investment, personal finance and entrepreneurship. I’ve held staff jobs at newspapers including The Observer, the Daily and Sunday Express and, most recently, The Independent, where I spent several years as Business Editor managing the newspaper’s business coverage. Two years ago, I went freelance in order to launch my own editorial consultancy, which provides content in three specialist areas: small business/entrepreneurship, investment/personal finance, and thought leadership. I continue to write for a number of newspapers, including The Independent, where I have a weekly column on topics relating to small and medium-sized enterprises, as well as magazines, web sites and a growing number of corporate clients.
This article was published in Forbes Entrepreneurs