Have you revised your firm’s business plan to account for the uncertainty created by the UK’s impending withdrawal from the EU? If the answer is ‘not yet’, the IoD’s Information and Advisory Service suggests how best to tackle this task
Your firm’s business plan is a crucial document, setting out a coherent strategy for growth and attracting investment, so it needs to be updated regularly to maximise the venture’s chances of success as it develops. This is particularly true during periods of great uncertainty. Whether you view Brexit as an opportunity or a threat, its many repercussions are likely to affect your company in some way. Numerous aspects of a business plan may need to be amended as departure time approaches. The IoD’s Information and Advisory Service (IAS) sets out some of the key considerations.
Plan for a range of scenarios
A good business plan will show a clear understanding of your enterprise and its markets. With important legislative changes yet to be confirmed, it would be unwise to assume that your operating environment will remain the same after Brexit.
Business continuity planning will help your organisation to deal with several possible scenarios and help to create flexible, long-term plans should certain events transpire. For instance, consider questions such as: “If the value of sterling were to fall to X, would it then be cheaper to switch to a domestic supplier of material Y?” Or: “If the UK were to remain inside the European Economic Area after Brexit, would that obviate our likely need to open an office in an EU member state?”
Consider workers’ rights
About 40 per cent of IoD members employ non-British EU nationals. Given what a significant impact the EU has had on UK employment law, addressing any possible HR weakness in your business plan should be a reassuring exercise. In a recent report by the Chartered Institute of Personnel and Development, Jules Quinn, partner at law firm King & Spalding, recommends that British firms conduct an employment audit of their UK-based workforces. This might, for instance, consider the possibility that some employees will have to apply for work permits if certain immigration rules are changed after Brexit.
Assess overseas operations
More than 80 per cent of IoD members have commercial interests relating to the EU, which could be affected by Brexit. Your business plan should already compare your current distribution channels with those of your competitors, but it should also now compare them with possible alternative options. This is all the more important given the customs-related disruptions that are likely to happen when the UK leaves the EU. For up-to-date information on operating abroad, call the IAS legal helpline, which has solicitors qualified in 26 European jurisdictions, or contact the Business Information Service for other enquiries.
Know your data obligations
The EU General Data Protection Regulation (GDPR) will take effect in the UK in May 2018. Broadly speaking, this is a harmonised pan-EU law that will replace the complex patchwork of national regulations that currently govern how personal information is handled. A GDPR compliance failure could result in a fine of €20m or four per cent of a firm’s global turnover for the preceding year, whichever is greater.
In June the government also confirmed that it was planning to replace the Data Protection Act 1998 with further legislation designed to help the UK retain its “ability to share data with other EU member states and internationally after we leave the EU”.
The IoD has a dedicated “Navigating Brexit for business” hub on its website (iod.com/brexit). This features fact sheets, articles and webinars designed to keep you informed in the run-up to Brexit in March 2019 and beyond. IoD members are also entitled to 25 free enquiries a year to both the IAS legal helpline and the Business Information Service. These are able to provide impartial advice on a range of issues relating to Brexit and business planning. Indeed, they can play a key role in keeping you abreast of all developments affecting the private sector.
Visit iod.com/information for further details about the IAS. This encompasses the Business Information Service (email); the Directors’ Advisory Service (email); and helplines offering tax advice and legal guidance
Business Information Service: 020 7451 3100
Directors’ Advisory Service: 020 7451 3188
Legal helpline: 0870 241 3478*
Tax helpline: 01455 639110†
* Quote your membership number.
† Quote your membership number and reference number 33337.