Finance
Sector Focus
David Hillan
Mid-sized firms prep for Brexit
The majority of mid-sized businesses (MSBs) in the UK have commenced preparations for the March 2019 departure from the EU – with most factoring in a ‘no deal’ scenario into their plans. That’s according to new research
from Grant Thornton’s latest International Business Report, which finds that only around a fifth (22 per cent) have done no planning, believe they don’t need to plan or still are unsure whether they need a plan. This compares with 73 per cent
of MSBs who had done no planning when surveyed six months earlier. And of the 78 per cent who have
made Brexit plans, many are still in the early stages of assessing the risks and opportunities Brexit poses (25 per cent from 18 per cent earlier), or have developed a contingency plan (36 per cent from one per cent earlier).
‘We’ve seen a sustained increase in demand from mid-sized businesses looking for advice – particularly in ‘no deal’ scenario planning’
A significant number (17 per
cent) have already started to implement their contingency plans (from nine per cent earlier). The research also finds that those
businesses who have conducted some degree of planning are largely factoring in an ultimate ‘no deal’ scenario into their plans, whereby the UK and EU fail to reach an agreement and the UK defaults to trading on WTO terms. Around 74 per cent include a ‘no deal’ scenario in their plans, from an
earlier 56 per cent of the minority who had done some planning at the time. Businesses were also asked about
their confidence in the UK and EU agreeing an outcome that is ultimately positive to their business. Nearly half of businesses
expressed a degree of confidence in a positive outcome. David Hillan, practice leader at
Grant Thornton in Birmingham, said: “Over the past six months, businesses have realised they can no longer afford themselves a ‘wait and see’ approach to preparing for Brexit. As the UK Government itself steps up its no deal contingency planning, businesses would be wise to plan for the worst, while still hoping for the best. “The prospect of the UK crashing
out of the EU in a ‘no deal’ situation seems likelier by the hour. “We are finding that those
businesses that are actively planning are much more confident about their outlook, with clarity on where Brexit impacts them and where it doesn’t. “Many of those taking a more
pragmatic approach are then moving on to focus on medium- term plans, redesigning their operating models to mitigate costs and support growth. They are even looking at their competitors’ exposures to assess relative advantages and scope for M&A opportunities. “Given the entrepreneurial nature
of many businesses in the West Midlands, it’s clear that many will be impacted by Brexit, particularly in the event of a no deal scenario. While there remains huge uncertainty as what the future may look like, it is important that businesses are planning for all eventualities.”
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February 2019 CHAMBERLINK 69
Specialists in Property and Commercial Finance
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