Now that the Brexit deadline has been extended to 31st October some businesses have been forced to reevaluate their Brexit planning.
The wheels were already in motion
Since the 2016 referendum British businesses have been evaluating how to weather the Brexit storm. For many the biggest issue was operating in an atmosphere of uncertainty. Nonetheless, as time went on, businesses had to make plans as best they could with the limited information available.
Given that many had decided upon their strategies and the wheels were in motion, this new delay is now posing a problem for some. Andrew Gray, Global Head of Brexit for Financial Services at Pricewaterhouse Coopers, stated that businesses “need to decide whether to pause and keep options open, to roll back preparations, or re-evaluate their options on a more strategic basis. It won’t always be as simple as changing the end date of plans already in place.”
Facing uncertainty… again
As debates and votes wrangled on, the appetite was for an ending so businesses at least knew where they stood. The Brexit extension has once more plunged British businesses in to uncertainty, which makes planning very difficult. Generally businesses have taken a cautious but hopeful approach to Brexit; planning for the worst, hoping for the best.
On one hand this means Britain is unlikely to face the International Monetary Fund’s forecast of a 2 year recession – for now. Unfortunately it also means we find ourselves back in limbo, where growth and profitability are stifled.
Andrew Graham, owner of British business Graham and Brown Wallpaper stated: “It’s a bit of uncertainty that isn’t helpful. Quite frankly, we could do with knowing where we’re going. An extension is better than no deal, but actually we could do with getting the withdrawal deal through so that business can plan for what it needs to do.”
The stockpiling conundrum
With the threat of leaving without a deal, many businesses prepared for Brexit by stockpiling resources from the EU. These stockpiles are now at their highest levels, but come at a cost or storage, maintenance and management. Businesses now need to decide whether to utilise these stockpiles and run them down, or hold on to them ready for October. Neither option is cost-free. For some smaller businesses, it may be the difference between surviving or not.
At an investment level, the Guardian has reported: “Companies say they will refrain from investing, given the uncertainty and the chances of fresh political upheaval from a snap election laying the ground for weaker economic growth in future.”
So it’s back to wait and see
The reality is that, once again, businesses can only operate with a ‘wait and see’ approach. It would be prudent to continue any measures which cut costs and save money as you wait to find out more. This should enable your business to better weather the further hard hits as they happen.
How is your business approaching the Brexit delay? What steps are you taking?
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A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.