Money makes the world go round. Brexit won’t change that. But what it will change is the context in which businesses operate financially. Here’s some things you should be thinking about now to get ready for the UK’s new start.
In our previous article we looked at how changes in the value of the pound can have a significant impact on your business and, if this affects you, what you can do to mitigate this risk. Of course, currency fluctuations aren’t the only financial challenges that businesses face. But is it clear that Brexit will affect many aspects of how a business is run and, ultimately, how profitable it is.
In this series of bite-size ‘Brexit countdown’ articles, we focus on the commercial implications of Brexit 2.0 in certain key areas and set out a high-level overview of the sort of things you should be thinking about with your teams and customers, and what you should be doing to get yourself Brexit-ready.
Last time, we looked at currency issues. In this article we look at other financial factors that may impact your business.
What sorts of things should you typically be thinking about?
Consider these key matters in particular:
- for each contract you have entered into (or are about to sign):
- do you know what the price includes and excludes? Could your contracts be made clearer?
- do they include price review and benchmarking provisions? Should they?
- have you considered the profitability of your contracts? To what extent will they be impacted by:
- fluctuations in price compared with market price for equivalent goods and services?
- increased delivery costs?
- increased labour costs?
- increased raw material and component costs?
- cost of insurance?
- changes in taxes and VAT treatment or both?
- changes in economic circumstances generally?
- rises in inflation?
- fluctuations in interest rates?
- availability of funding and increased costs of borrowing?
- decreases in consumer spending?
- any financial hardship generally?
Of course, every business will need to consider its own particular circumstances based on factors such as, in particular:
- its location
- the nature of its goods and services
- the business, economic and regulatory environment in which it operates
- the location of its key customers and suppliers, and
- the make-up of its workforce.
There is no one-size-fits-all approach to the analysis you need to do but thinking about the commercial aspects above can help you decide what legal changes (if any) are necessary now and in the months to come.
At Shoosmiths, we have stayed close to Brexit developments. As always, we welcome any thoughts or comments from you and are ready to help you prepare for Brexit.
We are also producing briefings across all specialisms to keep you informed of legal changes anticipated in light of Brexit.
If you have any queries, do get in touch.
In the next article in this series, we’ll be looking at terminating contracts and arrangements.