What Brexit has taught SMEs

Having endured the pandemic and the early stages of Brexit, what survival advice would SMEs share from their experiences?

As businesses head into phase two of life outside the EU, the survivors of Brexit’s difficult birth may now view the crisis as a badly behaved toddler demanding constant attention. While many are blocked by piles of administration, unpredictable transport and customs costs and problems with suppliers, others have learned some fast ways of easing growing pains.

Improving the supply chain

In the post-Brexit era, customer confidence comes as much from knowing how and when they will receive goods as it does their quality, says Dean Benson, founder of Visualsoft, an ecommerce and digital marketing agency. 

In response to Covid his firm introduced an option for clients to add emergency messaging to their website’s basket pages, advising of delays and providing other pertinent information. This functionality also lends itself well to Brexit, Benson says, informing customers of any factors that might affect checkout and fulfilment. 

It’s always reassuring when you understand you are not alone in trying to navigate the many unknowns of Brexit.

“We also support a number of promotional spots around the site so that messaging can be delivered via banners, pop-ups and stock messaging,” he adds.

If you’re a UK-based SME looking to serve EU-based clients, recommend suitable import agents to cut paperwork and costs, says Sarah Gilchrist, co-founder of Cannafull, a Scottish-based firm which makes cannabidiol (CBD)-infused beauty products. 

“Unless a business wants to complete technical customs paperwork themselves, they will need to engage an import agent. Typically, SMEs won’t have established relationships or networks for this, as if they do import, it is likely to be from within the EU. Make life easy by making introductions to import agents rather than leaving clients to figure it out for themselves.”

Share the knowledge

The unhappy collision of the pandemic and Brexit means many home-based staff are not kept in the loop on due processes, causing costly mistakes, says Clare Francis, partner and head of Brexit advisory at Pinsent Masons. 

“One member of staff incorrectly filling out one form can cause havoc, so training becomes essential,” she says. Businesses should reach out to trade bodies, which offer a wealth of support, free courses and up-to-date knowledge, she notes, “as well as helping you spot holes in your infrastructure and supply chain”.

Training is also key for navigating future issues in areas like data protection, says Francis. 

“At the moment data can flow freely post EU membership, but UK and EU regulators could go in completely different directions, impacting not just management of customer data but also where you host that data.” In the future, it may not be possible to host data in the EU and use it in the UK, she adds, with the potential for fines of as much as 10% of revenue for serious breaches. 

Cut costs where possible

Many firms are realising they no longer need to import or export at all. Noir Gallery sells canvases based on original photography and artworks by artists throughout the world. However, every time Noir sold a work, the business would be hit by unpredictable and expensive shipping costs. 

Co-founder Jason Wharton then signed up to Gelato - an international network of printers who print anything from t-shirts to art works - to print canvases at their destination, rather than print them at home and send them. The goods were then free of any customs fees, dropping their cost price from $65 to $25, says Wharton.

Elsewhere, many firms, rather than processing costly refund goods across EU territories, are simply arranging for secondary auction sites like John Pye Auctions or Trade Secret to pick them up, sell them and then split the profits as a revenue share. As more firms arrive in this space, competition will mean better deals for the refunding businesses.

Collaborate to share the load

Many firms are buddying up to survive the crisis. Both James Metcalfe, CEO of Volt Bikes, and James Edwards, founder of Piece and Quiet jigsaw puzzles, have benefitted from asking other businesses for help, alerting one another of hidden charges, changes in rules or supply chain issues.

“We accumulated an incredible network of fellow small businesses in that first 12 months,” says Edwards. “This has been essential for flagging potential challenges with others before they happen. It’s always reassuring when you understand you are not alone in trying to navigate the many unknowns of Brexit.”

Having open conversations with your logistics providers is also useful, says Francis. For example, businesses are now happier to share loads – ie a lorry transporting furniture might also offer space to a fashion retailer. 

“Previously people didn’t want their products mixed, now they are happy to as it saves costs and is good for the environment.”

Go local

With post-Brexit rules subject to constant change, many businesses are moving house before they are pushed. Honda recently said it was leaving the UK as it needed a warehouse as big as Amazon’s largest warehouse to hold just nine days of stock. 

Metcalfe decided to move Volt Bikes from Europe to Milton Keynes after nine years of manufacturing abroad, learning some useful lessons.

“To get the new facility up and running, we hired and trained an entirely new team and invested heavily into things like production software. We built up extra stock that we could fall back on if anything went awry in the move. I’m very grateful we did this, as the extra stock meant that we could accommodate for the sudden surge in demand for e-bikes, caused by the pandemic.”

Metcalfe is convinced the move was the right thing to do. “We still have our e-bike batteries serviced and repaired in Belgium, and what used to take one click is a three-week long process because of the paperwork involved, meaning some employees have had their roles change massively to accommodate this.”