Are you Brexit Ready?
As Brexit rapidly approaches how ready is your business to deal with it?
Brexit is a hot topic for many people at the moment so I thought I would weigh-in on the Brexit debate with my own insights. As Managing Director of STAR here in Ireland I’ve been planning for Brexit for a while and discussed it with many of our clients in both UK and Ireland. Here are some things to consider for your own preparations
Enterprise Ireland Checklist
One of the first things we recommend is that you complete the Enterprise Ireland Brexit Preparedness checklist. This is a great free tool sponsored by the Irish Government for companies to analyze what risks the company might be exposed to and how to develop a plan around this. Whilst originally designed for companies in Ireland it is just as useful for companies in the UK. Well worth doing. Look on the site for the Brexit ScoreCard
How Brexit Impacts The Translation Services Business
Language Changes: We have noticed a change in the languages companies are translating into. In the past UK-based companies would predominately translate into most European languages. However, many companies are reviewing the countries they sell into and are changing their spending patterns on translation accordingly. We’ve seen come companies reduce their spend for some markets, and instead request translation to expand into new regions such as Asia. For UK based companies it is worth considering what languages you will be translating into and any cost adjustments you might need. With the exception of Japanese and some complex languages, most languages costs should be pretty similar.
Vendor Choices: Some businesses in the UK have decided to focus on using local translation vendor companies. This helps them reduce their currency exchange risk in the short term. However, after Brexit it is uncertain if this will remain a solid strategy. There is potential that offshoring to translation agencies in the Euro zone might be more cost effective. Whilst you will still be exposed to some euro exchange risk, the risk would be reduced. The translation agency managing multiple languages and sub-suppliers would be carrying the risk. Your exposure would be to a single source vendor, as opposed to multiple vendors.
Current Fluctuation / Finance Implications
The current exchange rate fluctuation is a big challenge for every company trading internationally. For example in the translation services industry since Brexit the Euro – Sterling rate has moved some 15% or more. For UK companies this has made translation companies in Europe more expensive. We have had to adjust our pricing and cost structures to remain competitive in the marketplace.
Some UK companies importers and exporters are struggling if they are buying raw material from outside the UK for manufacturing. Following assembly in the UK and re-exporting they are getting a double hit in costs, tariffs and addtional overheads.
This has lead some companies to explore moving some or all of their operations outside the UK, depending on their supply chain.
Just in Time (JIT)
Manufacturer employing “Just In Time” supply chain delivery need to evaluate the costs of any hard border or import slow down as a result of Brexit. Any delays in production will impact revenue dramatically and at worst their ability to deliver product on time.
Options being taken by UK Manufacturers include, stockpiling product for the short term, increasing stock holding for longer JIT times or simply creating warehousing facilities in the Euro zone.
They restrictions on the free movement of people and its impact on staffing remains to be seen. There is potential for Brexit to impacts both current staff and recruitment.
Contracts, Benefits, Pensions, Visa’s etc. may need to be reviewed.
Hiring staff will also be more challenging and legislation has changed. Have you considered all the impacts on your company? With the multi-national and multi-lingual nature of our business this is a major consideration for us.
On staffing, even simple things such as sales teams moving in and out of Europe will need close review. If you have UK based sales teams travelling to and from Europe post Brexit will there be delays, additional travel costs etc attending sales, meetings exhibitions, conferences and client meetings?
What steps might be required in moving stands and expo equipment across Europe from the UK?
We are currently looking at our own Dublin sales team and how this might impact us travelling across the United Kingdom including Northern Ireland.
Brexit Impact on Manufacturers
Manufacturers are hit on a number of fronts.
- Import / Export Tariffs
- CE Marking / ISO Standards
At the moment current thinking is that CE Marking should be ok. However there are some concerns that there may be some additional legislation around this when products from the UK will be officially designated as coming from outside the EU. Additional certification or paperwork might be needed. On the other hand we’re currently not aware of any discussions about products moving from the EU into the UK. If you want to know more about CE marking you can contact the CE Marking Association in the UK.
We work with manufacturing companies around the globe and translate documentation into over 70 languages. One of the important things to remember is that we can update documents we have previously translated – so we can help control the costs of any new documentation if this has to happen for you.
What happens if there is no deal on Brexit?
This is a tough question. The UK government has an excellent resource on its’ website publishing information on a variety of supports and options for people and companies alike if there is a no deal Brexit.
How can we help?
Here in STAR we are in the same position as our own clients. As an internationally traded company we work with businesses around the globe. We have customers in the UK and elsewhere. We face similar exposures and challenges to our clients.
Our global footprint gives us the strength to help you deliver your products in whatever country you choose. If you’re considering expanding into a new region and have questions, we’re happy to discuss how we can help you reach new markets.
Brexit also brings opportunities. Read more about Brexit Export Implications and Sales Ideas.
What action can you do today to help your business?