Mid-size firms start planning for ‘no deal’

NEW research has found that the majority of mid-sized businesses in the UK have begun contingency planning for a ‘no deal’ Brexit.

According to business advisers Grant Thornton, which has offices in Manchester, only six months ago around 73 per cent had either done no planning or were unsure about whether they needed a plan.

That figure has changed dramatically, with almost 80pc now undertaking contingency planning and most of those factoring in the increasing possibility of the UK crashing out without a deal.

Businesses were also asked about their confidence in the UK and EU agreeing an outcome that is ultimately positive to their business.

Less than half of businesses expressed a degree of confidence in a positive outcome, but that was an increase on earlier this summer and stemmed from more companies proactively planning.

Andrew Howie, partner and head of international at Grant Thornton UK LLP, said: “Over the past six months, businesses have realised they can no longer afford themselves a ‘wait and see’ approach to preparing for Brexit and have started to take the necessary steps to fortify their operations.

“As the UK government itself steps up its ‘No Deal’ contingency planning, businesses would be wise to plan for the worst, whilst still hoping for the best.

“With around 100 days to go until the UK leaves the EU, and an agreeable deal yet to surface, the prospect of the UK crashing out of the EU in a ‘no deal’ situation seems likelier by the hour.

“Since the August bank holiday, we’ve seen a sustained increase in demand from mid-sized businesses looking for advice – particularly in ‘no deal’ scenario planning: identifying their exposures, developing plans and putting them into action now in order to ensure legal compliance and operational continuity come March 29, 2019.

“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 in more turbulent market conditions.

“Businesses have spent the bulk of the past two years awaiting steer from governments on both sides of the negotiation, but they’re clearly unable to wait much longer and are taking action in the absence of a clear Brexit roadmap.”