What Brexit has taught SMEs

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. 

“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.”