Make your own Brexit plan

Note: this is a blog about business planning – I have not intended to express any political views here and while I welcome feedback I do not want to start a political debate!

In any other sphere (except possibly wartime) the idea that what feels like the prosperity of the whole country was hanging in the balance the way it seems to be at present would be unbelievable. But still, here we are: less than 100 days to go and no concrete information to make decisions on, no way to realistically plan for 2019, right?

Well not quite. We know that the world will not stop spinning (*actually I’m just guessing on this) and although there will be political, social and economic upheaval we know that the businesses who have prepared will be the best placed to survive, and even indeed thrive.

The government announced in December that they would be writing to 140,000 businesses to help them plan for no-deal, but there are literally millions of businesses in the UK so this suggests that if you are not involved in directly importing or exporting goods then HMRC isn’t interested in communicating with you.

So if you’re an SME with a predominantly UK customer base how can you plan for whatever Brexit comes along?

No forecast ever perfectly predicts sales/ margins/ cashflow even on a relatively short timescale so the most important feature is to set out what you think the future will look like and identify the opportunities and threats that may arise. As a result you are better prepared to respond to whatever real twists and turns appear along the way.

Where are the risks in your business?

How might import tariffs affect your suppliers? Will that affect your profitability or lead times? Do you have other options that may not have seemed competitive before?

What about your customers – do they export your products? Will their business be affected by import or export duty on other items? How might this will affect you?

Even if this does not affect your profitability is there a chance that Brexit may cause them to slow down their payments? I think the answer to this generally has to be yes, because it is a natural response to uncertainty.

What about opportunities?

When it comes to marketing, are there opportunities to challenge bigger rivals who may be more affected by the effect of whatever Brexit deal comes about?

Can you make more of advertising how UK based your supply chain is?

Perhaps there are other opportunities – home grown food producers will be hoping that they can replace a lot of items which are currently imported. However when considering risks it always pays to think the other way around as well: will your market suddenly become more attractive to overseas suppliers, especially as a result of currency fluctuations.

The effect of all of this planning is that while you still won’t know what the future will hold you can make the best possible decisions for your business rather than following the crowd or being forced into making hurried reactions to situations that you are not prepared for.

More than anything else I firmly believe that spending time now considering the implications Brexit could have on your business will ensure you are best prepared for whatever comes.

A little perseverance goes a long way

Discussion at the Food For Thought workshop at Dartington Hall was lively and informative as the business people who came along shared their frustrations and challenges and, more importantly, their tips for successfully growing a food business.

The businesses in the room ranged from not-quite-started-up-yet to firmly established and kitchen based micro businesses to SMEs in their own factories. What all these businesses had in common was the desire to grow sustainably and profitably.

We were lucky enough to have a presentation from Victoria Townsend, head of retail innovation at Bidfresh. In that role and others Victoria has spent the last 5 years building relationships with major retailers to sell products for SME food businesses.

She shared valuable advice on establishing initial contacts with retail buyers and successfully developing business relationships with them, but most importantly her advice had perspective from her background of having founded her own food brand – biscuit recipe kits which she successfully pitched to Selfridges, Amazon and a host of other retailers before eventually selling the brand on.

One of the overriding problems that the businesses present reported was trouble getting through to the right decision maker at a prospective retailer. Victoria recognised that as a familiar issue and shared several ideas to make the approach more successful, chiefly remembering that your target is busy so getting through to them takes (polite) perseverance. Interesting tips about the timing of emails and quirky ways to approach buyers were appreciated by the audience.

When it came to the face to face meeting the definite consensus between Victoria and Barbara King was that excellent preparation was a basic requirement. Comprehensive product information should be sent to the buyer in advance and then product and packaging samples should be taken on the day.

Where you could really make a difference was in the follow up to that meeting: sending any additional information promptly and completing any agreed actions by the agreed deadline. It was always worthwhile completing any training that was available on the retailer’s in house systems as they all differed by they were key to smoothly launching products.

Growing sales with products which have already listed with retailers both large and small involved keeping in regular contact with buyers. Victoria suggested making contact monthly to review sales and keep up to date with the retailer’s plans for growing their own sales. Having contact details for both the buyer and the administrator so that when staff change there is a backup contact to maintain continuity.

Conversation ranged across all sorts of related topics, but one interesting point was the suggestion of “white labelling” products for a retailer, either on a small scale in local shops or working with major retailers on own label products. Victoria stressed the value of being able to do this in order to allow efficiencies in ordering and production runs, but once again this required planning and an understanding of profit margins in order to make the right decisions.

In summary the key strategy for success was to find ways to make buying from you easy for the retailer, and aim to understand their strategy as well as explaining your own.

2019 will see additional Food For Thought workshops around Devon. Find out more here