The UK’s economic future: How SMEs can prepare

We’ve read some sobering headlines over the last six months, predicting everything from environmental disasters to the demise of the NHS.

The reality of what happens post-Brexit and during Trump’s Presidency will most likely lie somewhere in between the predictions of the supporters and opposition of the situation Great Britain finds itself in.

Reports of the plummeting value of the Pound have lingered, despite a ‘mini resurgence’ following Theresa May’s Brexit speech today.  As GAS predicted back in September, the cost of importing goods to the UK has risen and is having a knock-on effect on the pockets of businesses and consumers.

Add the highest rate of inflation for two years, the rising cost of raw materials such as oil (see more here) and slowing wage growth into the mix and the pencil sharpeners are out again across the country.

 What will this mean for my business?

Theresa May’s plan for Brexit started with her speech at Lancaster House yesterday and stated that: “Voters accepted that the road ahead will be uncertain at times.”  Somewhat of an understatement when applied to the current feeling amongst businesses in the UK.

Despite making some high-level statements and setting out her stall, the PM provided no further clarity over what changes businesses will need to adapt to.  So, what can you do as a business owner to protect your assets and your employees’ livelihoods on the rocky road ahead?  Here are some best practice starting points to be considered.

Build a 360-degree view of your finances to allow agile decision making

Conduct a full running cost review or ‘procurement audit’ on your business.  What are your outgoings?  If you’re a business owner you will know most of this from the top of your head.  Your balance sheet will have these on, but make sure you consider the little things too – how much do you spend on pens? Soap? Paper towels? Toner?

What contracts are you tied into?  What can you address and adjust?  Longer term contracts may well be of further benefit to you.  As prices increase you want to be paying your current rate for longer (unless your current rate is over the odds).

Keep this information as a working document or a spreadsheet.  Once you have this overall picture you can then pick out areas that governmental policy changes will affect.  Research where the things you procure come from.  If it’s from the EU, the chances are it’ll be costing you more soon.

Ask your customers their thoughts

Your customers will be hit in the pocket even harder than your business.  Bear this in mind when adjusting your prices.  It may be that your financial growth will need to slow slightly over the next few years in order to maintain your customer base.  Find out from the horse’s mouth what they think about the latest developments as they happen, then carefully mention how it might affect your business and judge their reaction.

Control what you know you can

Great Annual Savings Group’s advice is always to take control of your variable costs where you can.  For example, if you can sign a good energy deal that you’re happy with over the next few months, which you know will see you through the Brexit negotiations and beyond, then it’s an even better deal.

We are seeing our customers take this approach more frequently.  It’s useful in the right circumstances, depending on your business’ attitude to risk, because it allows effective financial planning into the future.  Suppliers are aware of this and build similar risk-protection into their prices.  Longer term contracts will have higher unit prices because of this, but the right one can still save your business money, depending on the way the market goes in future – which is why it’s the perfect time to investigate.

In short, having a guiding hand is invaluable to businesses right now.  GAS can offer a no-obligation assessment of your bills and help you prepare.  From energy to water to waste management to security and beyond – GAS’ expertise helped save businesses of all sizes millions of pounds in 2016.  See what we can do for you.

There’s one thing this week’s developments have taught business leaders: the time to prepare for Brexit is upon us.

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