Brexit and COVID may have impacted your supply chain, but with the right funding in place you can overcome roadblocks with ease.
There’s no doubt that businesses have seen a lot of disruption over the past twelve months. Forecasting has been difficult, demand has fluctuated and supply chains have been impacted. While the pandemic has played its part, the uncertainty around Brexit has made everything even more confusing for the country’s small businesses ‘ particularly when it comes to supply and distribution.
Although economists are predicting that leaving the EU will have a negative economic impact on the UK in the short and medium-term, there are always opportunities amid disruption.
We need to remember that Brexit is not a single event, but an ongoing process. It won’t be clear immediately who wins and who loses, so don’t let the uncertainty weigh you down. Business owners need to act now to put robust systems in place to manage their finances and find new opportunities.
The last minute nature of the Brexit deal meant we’re being asked in real time to react to customs changes. The Road Haulage Association estimated that we exported 68% less in January 2020 compared to 2019. This caution is understandable when the existing systems rely on paperwork. Creating a strong digital platform that can be rolled out efficiently is not an easy or quick task. The added headache and time involved mean cash isn’t the only thing these changes cost.
When your supply chain is subject to lengthy delays and extra paperwork, having the right funding in place allows you to do several things. First, you can afford to order earlier to protect your stock levels. Doing this also allows you to potentially order larger quantities and negotiate discounts on your orders.
Secondly, it gives you the capital to afford to implement the right technology and team to manage the new administrative burden. Will you need to hire someone new to manage the stack of paperwork? You might need to take on a freelancer to manage the work of an existing team member who’s now dealing with this workload or finding other trading options.
And finally, you can use your capital to invest in ordering from new suppliers in other regions, which allows you to explore more opportunities. If you’re going to have to engage with new customs forms and documentation, then you might as well do it for a territory that offers you even more in terms of value and quality. It might take added time and funds up front to do this work, but you could benefit from the shake up.
Delays in distribution ultimately mean delays in your invoices being paid too. And it only takes a couple of mispayments by a customer to land you in trouble financially. At MarketFinance we’re in the process of launching a buy now, pay later product called MarketPay where we pay suppliers on day one and offer their buyers 90 days to pay us back. The idea is to free up cash flow on both sides, allowing everyone to get on with running their business. Hopefully this freedom will allow business owners the financial power to explore new opportunities and grow.
When it comes to opportunity in Brexit, look at Liverpool. This historic port is taking traffic that’s trying to avoid congestion at its rivals in the South. Many hauliers and logistics companies are passing their exports through the North West to go on ferries to Northern Spain. There has been over £400 million worth of investment to make sure it’s set up to do just that. Where else can you find opportunities?
Full import checks are coming into place on July 1, so even if you’re not feeling the full impact now, you might do in a few months. With the government’s Coronavirus Business Interruption Loan Scheme (CBILS), businesses can borrow between £50,001 and £5 million ‘ and you won’t pay a penny in fees or interest for a year. At MarketFinance we offer business loans and revolving credit facilities backed by your invoices through the scheme. So whether you need a cash injection or funding you can dip in and out of, there’s a solution for every business.
The realities of our trading relationship with the EU are still being navigated and will be for some time. Make sure your business has the resources to manage these changes and find the right opportunities to make it through stronger.
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