Empowering the Freelance Economy

Brexit border delays: Tips on how small business owners can manage customer expectations and cash

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The majority (61%) of UK business owners are optimistic that the UK government will be able to strike a Brexit deal with their European counterparts in the coming days, according to a survey of 5,000 UK business owners. However, most businesses (46%) anticipate delays of one to two weeks in processing goods at borders because of changes to processes.

Lack of clarity

UK business owners ranked lack of clarity on new border control processes as the greatest challenge followed by delays in sending and receiving goods, and uncertainty about demand for goods and services in European markets, according to the MarektFinance report.

The new regulatory requirements are likely to cause serious congestion at ports, including Dover and Felixstowe, delaying imports and exports, while new tariffs imposed in the event of no-deal will all but halt exports of some products — such as lamb — and imports of others, according to an FT report.

Andrew Opie, director of food and sustainability at trade association the British Retail Consortium told the FT, “The ongoing uncertainty surrounding the new checks and red tape that will apply from January 1 will create disruption in the supply of many goods.”

One company that has had to take drastic measures as a result of the global logistics crisis paired with the pending no-deal Brexit was Honda, which drafted up emergency plans to fly components into the UK to bypass a ports logjam that caused the Japanese carmaker to shut its Swindon plant. The Swindon site had to cancel production following a key parts shortage that was being shipped via long-haul ships.

Cheesed off?

The general consensus is that the border delays will ease after a period of three months, but then the matter of import taxes on goods such as speciality cheese could go up as much as 50%, according to a London School of Economics report. It is anticipated that £3bn in food tariffs will arise because retailers will have no choice but to pass on some of the additional costs, according to the British Retail Association.

Buy Local and other Campaigns

Inventive ways to cover the cost of tariffs while keeping customers keen will be paramount for small e-commerce businesses.

  • Supplying and promoting local alternatives is one way to ease customer frustration.
  • Offering freebies or future purchase or delivery discounts on any products that may experience a Brexit Border delivery delay may also be appreciated by customers.
  • Or even create a ‘Worth the Wait’ campaign for those products you know are popular with customers.

Financial cushions

Two-thirds of businesses have tried to put some financial measures in place to survive the difficult Christmas trading period.

  • Most (23%) have turned to a revolving credit facility or invoice finance, whilst others (14%) have turned to increasing their business insurance cover and (14%) renegotiating payments terms with suppliers.
  • In addition to this, business owners have targeted improving their social media presence and website (66%), putting in place a clear operational plan to manage supply chains and distribution (42%), as well as focussing on employee engagement (23%).

Anil Stocker, CEO of MarketFinance, said, “The impact of the COVID-19 pandemic has been indiscriminate. Businesses were hurt in the summer and could take another blow this winter. The Christmas trading period is clearly an important time for UK businesses but given the bleak expectations, I would encourage all owners to seek counsel from their advisors and ensure they are braced for the coming months.”

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