Neglecting to have such conversations, however, could damage relationships and, whilst long-term certainty might be difficult to provide, there are some positive steps businesses can take to ensure your supply chain feels valued throughout this tricky period.
Brexit has thrown up a multitude of issues for SMEs and with so much uncertainty remaining; many businesses are struggling to plan for the future.
Arguably, Britain exiting the EU might not have been so much of a big deal for smaller companies ten or 20 years ago, but the modern business world is globalised. Technology means that businesses trade very differently and even a one-man-band nowadays may well trade with companies all over the world.
In today’s culture, merchandise is king and materials made all over the world are used in everyday products. The UK must remind itself that Brexit could dent the supply chain of such products and so directly impact the UK market, its economy and in that regard, your business. These uncertainties mean Brexit poses a number of challenges around manufacturing, procurement, skilled labour and affordability.
This climate of ambiguity may well lead to bosses feeling that their company’s future is out of their control, but there are a number of practical steps businesses can take to make the journey, especially when it comes to suppliers, smoother.
Make sure that you work with people you trust
Relationships are important for SMEs and spending time maintaining contacts, communicating with suppliers and ensuring high levels of trust are present is vital. Review your suppliers and open up discussions about the future.
Creating long-term relationships can be the key to opportunity and while you may not be able to predict to your supply chain what will happen in two or three years, you can reassure them that you are planning carefully for every eventuality and their business is important to you.
Analyse all existing contracts carefully.
Take time out to look at the agreements you have in place and take advice on any terms that you’re not sure of. Ask yourself what will be the cost to the business if this contract terminates and what impact will this have?
Review your business structure
It is also worth taking the time to look into your business’ structure – would an issue with a core supplier cause problems? Taking the time to do this due diligence now and troubleshooting any potential major problems could cause significantly less headaches further down the road.
Focus on value rather than cost
Cost cutting can be tempting and of course, identifying savings is paramount, but adding value by assessing new opportunities will help to encourage new prospects that may replace lost business in the event of a Brexit dip.
In terms of your contracts you should think about the law applicable to these and make sure you can enforce your contract in the UK should that be required. It would be a problem if the contract was in any way unclear – SMEs don’t want to argue about jurisdiction or in the worst case scenario, have to travel abroad to settle a dispute.
If Brexit puts a question mark over the certainty of your business this may lead to difficult conversations with funders and banks. Being prepared and having a strategic plan is undoubtedly the best approach.
Vanessa Crawley is solicitor in the corporate and commercial team at SA Law