I remember very clearly the first thing I did when I woke up early on the morning of the 24th of June 2016; I picked up my phone to check the BBC website for the final results of the Brexit referendum that had taken place the day before.
When I had gone to bed the previous night, Nigel Farage had appeared to have conceded that the remain vote had just edged it, but now, a mere 7 hours later, I was reading that the UK had voted to LEAVE the EU.
The first words out of my mouth are not repeatable in this short piece, but its fair to say that I, like many others, hadn’t seen this coming. I dressed quickly and got into my car and drove the 90 minute journey to the head office of the business I was working for at the time, where, despite it being not much later than 7am, there was already a hive of activity taking place.
The door of my bosses office was closed. Rarely would this be the case unless he had someone in with him but I could see through the small window that he was alone so I knocked and then entered. He, like me, was shell-shocked.
The impact of the referendum result was instantaneous for our business: The majority of our stock was purchased in US dollar with the remainder in Euros. On the other hand, the majority of our sales were in Sterling.
Overnight the value of the pound had nose-dived and as a result, the cost of the supply contracts we had just agreed for the nine-months or so ahead had just increased significantly. All our sea-freight contracts were also in USD or Eur so moving product had just become very expensive, especially in the raw, unprocessed format that we purchased a lot of it.
As you would expect for an organisation the size of ours, we had, of course, planned for such a scenario in advance. Currency had been hedged through both forward contracts and options and we had considered inventory/stock held and our future contract supply commitments and potential lead-in times for spot cargo’s when we had concluded raw material contracts. Despite all of this, it was only the beginning of the process and there was many more plans to write and much more planning to do.
Nine months after the referendum, Article 50 was triggered by the UK Govt on the 29th of March 2017. This officially signaled the commencement of a two year negotiation period on the terms of the withdrawal agreement (the divorce agreement). Today, the 29th of March 2019, was meant to be the conclusion of that period: BREXIT day.
Instead, MPs have for the the THIRD time rejected the withdrawal agreement that had been negotiated between the British Govt and the EU.
So what’s next?
The legal standpoint is that without the ratification of the withdrawal agreement, the new Brexit date is the 12th of April 2019. This is two weeks from today. As it stands (with the caveat that things have already been changing very quickly so nothings written in stone), the UK will leave on that date with no transition period and no side deals, i.e. it would be a hard Brexit. The EU Council have already tweeted to say that they are fully prepared for that scenario.
In my very humble opinion, the alternatives to a No Deal Crash Out (I’m calling it that as this is exactly what it would be) at 11pm on the 12th of April 2019, can be summed up as either a long extension of Article 50 or the revoking of Article 50.
I, personally doubt that Article 50 would be revoked without there first being a general election called or a peoples vote to either ratify or reject the WA agreed by Theresa May. If the WA was rejected by the people, there would then have to be a vote to consider the alternatives, including revocation of Article 50 or an exit on WTO terms. Again, and only my personal opinion, I would consider an exit on WTO terms as the ‘Nuclear’ option.
The EU Council could in any case take this all out of the UK’s hands by refusing to grant any further extension without a firm indication of the way forward on the 10th of April. If that happens, the UK are then either forced to leave or they revoke Article 50 and pull the plug themselves.
“Don’t Rule Out a No-Deal Exit. In fact, this is a very real possibility”
Have you a Plan?
I have spoken to many people over the course of the last 33 months on what leaving the EU will actually mean both personally, and, if applicable, in terms of their businesses. The most common response has been that nobody really knows and as such, there’s not much they can do about it until it happens.
I’m sorry but I find that simplistic and reckless.
Despite not knowing what the future holds for me and my family, I have put measures in place to try and mitigate some of the risk. These measures include a healthy diet and exercise, investment in my children’s education and private health-care provision.
On a business front, I have paid a very close interest to what has been happening around me and then I have looked at how each scenario can impact on my future operations. I have considered opportunity as well as threat – hence why I’m a registered service provider with InterTradeIrelands Plan for Brexit Scheme and an InvestNI approved Consultant.
I am yet to speak to a business person that will not be in some way impacted – either positively or negatively – by Brexit. This includes clients of mine that operate service-based businesses such as cleaning and hairdressing who you may have thought would be completely insulated by this matter.
I was always taught the Four P’s:
” Preparation Prevents Poor Performance”
Come to think of it, there may well have been another ‘P’ in there just before Poor!
There is so much support out there for businesses around Brexit that there really is no excuse for not utilising it.
For Micro and SMEs operating anywhere on the island of Ireland, I firmly believe that the starting point should be InterTradeIreland’s Brexit Planning Voucher. InterTradeIreland provides 100% financial support up to £2,000/€2,250 (inclusive of VAT) towards professional advice to help businesses to identify Brexit exposure and to plan. This includes issues such as customs requirements and supply chain exposure, VAT and financial implications, as well as understanding complex tariff codes.
Fortior Insight Ltd is an approved service provider for this InterTradeIreland scheme within the categories, Change Management, Customs, Supply Chain/Procurement/Logistics and Other. In real terms, this means that, for no cost whatsoever to the business, we could assist you through any one of the following assignment briefs;
- producing a contingency plan for your business,
- scenario planning,
- supply chain mapping,
- procurement projects,
- introductions to customs intermediaries,
- defining the potential impacts, both financially (via product tariffs and euro-sterling exchange rate fluctuations) and through non-tariff barriers (NTB’s), to your business,
- development of a future strategic or operational plan for your business,
- change management project, i.e managing the people side of change to achieve a required business outcome,
- defining a post-BREXIT marketing plan,
You can find out more information, check your eligibility and complete the short application here.
Whatever happens next, there is a long way to go, so whatever you do and whoever you do it with, I implore you to ………