Prepare for Brexit: Business Strategy
While a lot of uncertainty exists around exactly what Brexit will mean for the European trading landscape, Irish companies need to examine their business strategy now and decide where adjustment, if any, is needed.
This is crucial if companies are to be in the strongest position possible in terms of managing the range of challenges expected as well as taking advantage of new opportunities.
One way or another, Irish businesses will have to deal with a new set of circumstances in the years ahead in relation to the UK. This means they need to take stock of their current position, consider the implications of Brexit and plan for every scenario in order to meet growth targets.
An adjustment in business strategy could mean anything from deciding to take a different approach to the supply chain in the UK, to diversifying into new markets altogether or placing an increased emphasis on innovation to improve competitive advantage.
Over-dependency on the UK
This is an issue as there is a chance the UK economy could decline as a result of Brexit, which in turn means less demand for Irish companies’ goods and services.
In addition, Brexit could mean less inclination to buy Irish products and services due to campaigns promoting British-made goods, such as the Red Tractor initiative for food and a possible drive towards a general ‘Buy British’ movement.
From a strategic point of view, if you feel as a company that you are over-reliant on the UK you can act now by working on a plan to protect your existing business there while also exploring which other markets you could diversify into.
Uncertainty about sterling
The euro-sterling exchange rate has been one of the most obvious effects of Brexit so far. A lower sterling value directly impacts Irish exporters’ bottom line.
You can pre-empt difficulties around the value of sterling by establishing what your break-even exchange rate is and considering financial instruments to provide a degree of certainty.
Currency volatility may dictate the sourcing of inputs from new suppliers and/or importing through EU countries instead of the UK.
Brexit could mean increased and new competition from the UK and other international markets. To tackle this challenge, you can identify areas now where you can reduce costs and improve efficiencies. It is also important to gain a greater understanding of your current competition and develop differentiated offers.
Prepare for Brexit
Your business can start to prepare for Brexit by using the dedicated Brexit SME Scorecard tool, which is available free from Enterprise Ireland. The tool looks at a company's business operations across six areas - Business Strategy, Operations, Sales and Marketing, Finance, Innovation and People Management. You can start the short questionnaire and come back to it at any time. Your results report will show the priority areas that your business should consider addressing and serve as a useful kick-off point to start preparing for Brexit with your business team.
Read why it so important to have a good business plan for Brexit — Click Here