The chances of success or failure of these strategies presents a further unknown factor to be dropped into the boardroom, given that the type of exit from the European Union that the U.K. will face us itself highly uncertain. The possibilities range from a hard ‘no deal Brexit’, with essentially no ties to former European partners, to a soft Brexit where trading structures remain in place.
There are some 5.7 million small to medium sized enterprises in the U.K, each facing common and sectoral specific problems. A recent review by The Guardian assesses how businesses operating different sectors are preparing for the most uncertain of economic futures.
Pharmaceuticals
In the pharmaceutical sector, most organizations have needed to set up offices with qualified staff within a European member state and to transfer their market authorizations for products that they wish to sell within the European Union. While this expensive arrangement should address the distribution of products within Europe, how healthcare products can be imported is not clear. The possible consequences of Brexit for medicines shortages in the U.K. is a very real possibility.
Construction
In construction a major concern is with supply links, given that few construction firms can make every component required for a project. A further complication is with raw materials, with many firms being reliant upon materials coming from overseas, especially steel imports. Most construction companies are seeking ways to maintain supply relations with European firms, although the process of importing, tariffs and standards has yet to be defined. For companies who operate lean manufacturing, with ‘just-in-time production’, any hold ups at ports will be costly.
Other sectors
With other sectors, expected restrictions on the free movement of people will gave a big impact. Many businesses, from agriculture to manufacturing, employ high numbers if EU citizens, especially from eastern European states. Fewer people are coming to the U.K. to work, and this has meant many firms needing to revise their recruitment strategies to try and attract locally based U.K. workers.
Small to medium sized companies will be hoping that clearer signals as to what Brexit means emerge, and that a parliamentary consensus is reached, ahead of the proposed date for exit in March 29.
