Rafael Rozenson, founder and CEO of protein water manufacturer Vieve, explains why small businesses can’t afford to make the expensive contingency plans necesary to protect themselves from every Brexit scenario

Has Vieve come up against any Brexit-related issues already?

Vieve is a protein water-based drink that is different to other drinks on the market. We’ve been trading for just over a year and a half and our business is quite unique, so we do about 70% of our business on exports. We are in about 16 countries now across Europe and the Middle East and we’ve just launched in Asia. Brexit has had quite a big impact on us, because we manufacture in the UK but import all of our ingredients that go into making the drink from Europe. So that is presenting quite a big challenge.

We also have quite a few customers in Europe and we’ve had quite a few distributors who are quite keen on our product, but because of Brexit they keep pushing back or saying that they don’t want to launch the brand, because it is quite an investment to launch in a new market. It’s just so frustrating because we’ve managed to secure all of this business in Europe and we’re talking to all these distributors at the moment, but nobody wants to commit until we understand what is happening with Brexit. It makes a lot of these discussions very difficult.

Have you looked at opening a base in Europe for Vieve to circumnavigate some of these obstacles?

We just don’t have the funds to be able to do that. We can’t afford to set up and have an office in Europe and an office in the UK.

What preparations have you made for Brexit?

We are now VAT registered in a couple of European markets, in Germany and France. So potentially what we could do is set up a warehousing operation where we stockpile some goods for some of our European customers there, but again it’s quite an expense. We are not a big company, we don’t have the funds to do all this contingency planning for things that might never happen. Even being VAT registered in another country means paying another accountant to file our VAT returns, which is like another thousand euros per country. It’s very difficult to plan for because we don’t know what’s happening and we don’t have the resources that the big companies have.

Have you found the Government to be suportive of you as a small business?

We find the advice you find on gov.uk to be very limited and not very helpful. And, in the course of two years, we have received one letter telling us that we need to register for an export number and that’s the extent of how much the Government has tried to support us in getting ready for Brexit. I do network with other entrepreneurs and we do try to support each other, but again basic things like understanding what tariffs we will have, it’s very difficult to know. Nobody really knows what’s happening, everyone is in the dark, so it’s pretty difficult to plan.

Have you tried to push out into other markets because of Brexit?

Well we are a young business so we take business where we can get it and our products have been well received in the Middle East and we’re in South Korea from this month, but there are a lot of complexities involved in exporting to new markets, each registered product needs new paperwork, whereas now when we export to Europe it’s so easy.

Paul Lusty, owner and director of Gloucester-based specialist transport and logistics firm WMB Logistics, says it’s very difficult to prepare even customs paperwork for Brexit when you don’t know what paperwork is required

Can you explain what WMB Logisitics offers?

We are a specialist haulier. Our main business is transporting motor cycles. We distribute for two of the major manufacturers and we do shows and anything marketing wise for the rest of them. There are only two manufacturers in the UK that we don’t work with.

How much of your business is based in the EU?

Most of our business is based in the UK but a lot of the bikes come in from Europe. One of our manufacturers is in Austria, for example, and one of them is in America, but they ship in to their European distribution centre in Belgium.

How is Brexit likely to impact on WMB Logisitics?

We’ve taken the steps to be able to clear customs documents coming in to the UK for our customers. We’ve registered with Descartes, so we can clear customs for our customers coming in to the UK. But there is not a lot more we can do at this stage really, because we don’t know what’s happening.

One of the dilemnas we’ve got, and we’re used to dealing with things like carnets and customs paperwork, is we don’t know what type of customs paperwork we’re going to require. We’ve got a show at the NEC, the biggest bike show in the country, in November and we’ve got bikes coming from the Eicma bike show in Italy. They are being picked up on the 10th of November, so for instance, how do we get those bikes back into the UK, because nobody seems to know. We don’t know whether we’ve got to bring them in under carnet, because initially they are going from Germany to Italy and then they will come to the UK and then they will go back to Germany. So the Germans need to raise a carnet in theory for the bikes to come into the UK, but nobody can raise a carnet yet because the UK is still in the EU. So we’re just stuck. Everybody is in limbo really.

Tim Holt, co-founder and finance director of Cheshire-based Plastic Card Services, says that he noticed that businesses seemed to show a litte more confidence when Boris Johnson took over as Prime Minister

What does Plastic Card Services produce?

We manufacture plastic cards – membership, hotel and loyalty cards. We are not a secure printer so we don’t do creditcards, but we do everything else.

Have you been impacted by Brexit in any way?

Yes. The main factor has been the indecision. A lot of businesses have been sitting on the fence waiting to see exactly what was going to happen and nothing has happened. There was a period, probably about eight months ago, when people just weren’t making any decisions and were just waiting to see what would happen. Since Boris Johnson has come in and made his point of exactly what he wants to do, there seems to be a bit of an upturn, because at least there is some direction, whether it is right or wrong.

Do you bring materials in from the EU to manufacture your cards? 

We do. We source from the Far East and Europe, so Brexit could potentially impact on both of those, depending on what happens at the docks. That’s where we envisage our problems will be. Consequently, we have slightly increased the stock that we carry, but we always have a minimum of 16-weeks stock, and I think realistically the volumes involved and the money tied up in doing that means that we can’t carry much more than that anyway.

Have you got any EU staff that could be impacted by Brexit?

We do have some EU staff, but they all seem very relaxed about it. I think that no one can actually believe that it is actually going to happen one way or another. They are all good workers, we don’t envisage there being any problems, but who knows until such a time that the Government of the day and Europe makes a decision we won’t know what we need to implement to keep them here.

Ed Hollands, founder and managing director of Nottingham-based truck advertising firm DrivenMedia, explains how his Dragon’s Den-backed firm is indirectly being impacted by Brexit

What does DrivenMedia do?

DrivenMedia is a truck-advertising firm. We work with advertisers who want to put their brand on to trucks as they go about their normal business and we work with haulage firms that transport goods.

How has Brexit impacted DrivenMedia?

We have primarily been affected because our hauliers have been affected. We have minimum driving hours that the trucks have got to reach for our advertising. If trucks are being used less or have less driving hours, we become stuck in a situation where the trucks aren’t quite driving enough for us to pay them. And our hauliers are already struggling because of Brexit, because 1. their customers are ordering less or sourcing from different suppliers;  and 2. they can’t plan ahead and that means for us it’s harder to schedule trucks and their movements.

What preparations have you made to support DrivenMedia through Brexit?

There isn’t a lot we can do. It’s a supplier thing. We often don’t know what our trucks are going to do until they actually do it, but we are trying to partner with our hauliers and incentivise them to focus on running less trucks but running them more often if they can. Not only will that save them money, it will make our advertising look better. On the ad production side, I think we will be okay for a while, because all of our suppliers have got materials in stock.

Have you looked at expanding into Europe to pick up business from there?

We are trying to expand into Europe, but it’s very tricky. I’m trying to apply for an EU trademark, but if we do have a Hard Brexit I then can’t use English as a language and I have to use an agent that is already in the EU which makes things more expensive. And there is also the matter of importing potentially into Europe trailer curtains and tracking devices or finding alternative suppliers in the EU.

What would you like the Government to do to help you through Brexit?

We need to know what’s happening. It can’t be No Deal one minute and the next maybe we have a deal. They need to have a plan so that we can plan for whatever it is.

Richard Davies, managing director of Cheshire-based Hattons Model Railways, says that trading internationally has prepared him for following WTO rules in the event of a no-deal Brexit

How prepared is Hattons Model Railways for Brexit?

I’d like to think that we are well prepared. We are a pragmatic operationally focussed company. We have grown an awful lot over the last 20 years and that’s through being very practrical and very IT-oriented. We have put the customer first by letting the technology drive the business.

The vast majority of our stock is made in China, so we envisage that there may be a few delays for stuff coming in through China, but it’s not really a major problem as we don’t source much stock through the EU. With regard to the purchases of stuff to help us run the business, i.e. packaging materials, labels and card and that kind of thing, what we have done is forward bought an awful lot of what we need to cover us for at least eight weeks after Brexit day. We did this for the initial March deadline and again we have done this for the next deadline. These sundry items are not expensive, so it hasn’t had a big impact on our cash flow, but without them the whole operation could stop. If anything, the only problem it has caused us is finding storage space for it in the building.

What percentage of Hattons Model Railways’ customers are based in the EU?

Of our £17 million turnover about 10% of that is to outside of the UK and just over half of that it to within the EU. From our point of view, because we are a very tech driven company and because the average order value is over £100, having the right IT systems ready is the best we think we can do for when there is any change over or move to WTO rules, so we can easily modify our systems to make sure that we can carry on shipping through our normal services. The software that we use to facilitate our international shipments is called  GFS Checkout. It is bulit in to our website ordering system and it will, if there are any changes i.e. in taxes, make that change automatically for us. We want to be transparent with customers with what we are doing and this system allows us to do that.

How has the fall in the value of the pound impacted on your business?

Well, after the referendum, when the pound crashed then what that meant for our international customers was that they were getting more for their money so we saw an increase in trade straight after the referendum. We have seen particular growth in custom from Australia and America since the fall of sterling, so that has been a benefit for us, but our costs are also going up for the products we are buying in. So it’s a bit foolish to celebrate the problems of sterling because they catch you on the other end. We do think that the pound is likely to fall further and with some of our suppliers in China we’ve actually paid some of our bills early and negotiated better rates.

We are one of the biggest firms in the industry and we try to be minimal hassle for everyone. I just wish Brexit was over with quicker really, but I suppose everyone feels the same way. I’m not daunted by moving to WTO rules, because we’ve been doing that for a long time with many other countries anyway.

Julianne Ponan, founder and owner of Surrey-based ‘free-from’ products manufacturer Creative Nature Superfoods, is frustrated by the continuing Brexit uncertainty

Can you explain what Creative Nature Superfoods offers?

We offer a range of ‘free-from’ products, which includes snack bars, home-baking mixes and super foods. Our products are free from the majority of the top 14 allergens and are vegan. I’m an extremely allergic person and have anaphylaxis. Snacking – and eating in general – poses daily challenges for someone like me. When I took over Creative Nature and remodelled it into a food brand, I decided to create products for people like me, I wanted to be able to sometimes grab a quick snack which was safe for me to eat and which was tasty.

Our raw materials are sourced and imported from around the world and manufactured in the UK. We are now stocked in the major supermarkets, including: Sainsburys, Asda and Ocado. We also export to many countries around the world and we sell online.

What preparations has Creative Nature Superfoods made for Brexit? 

Although I was pro-Brexit at the time of the vote, I’ve become more alarmed at the stagnation and the uncertainty caused by having no clear plan or real direction. We, therefore, started to make plans by taking on more warehouse space to hold more stock, planned ahead for new products in the pipeline to ensure we have raw materials for those where we can and we’ve also organised longer contracts with our European suppliers to try to safeguard our supply chain.

What do you see as the main problems your business will face after Brexit?

For an SME such as Creative Nature, our main concerns are around our supply chain and the ability to fulfil orders. We are particularly worried about: products getting stalled in custom for an unreasonable time; more paperwork without more funds to increase team resources; and more staff training on new procedures, which causes delays and blockages in a small team.

What external support is helping you to solve the issues that Brexit has thrown up?

We’ve worked very closely with the Federation of Small Businesses to have a voice around this uncertainty and also to look in particular at the possible risks to a business such as ours.

What opportunities do you think Brexit will present for your business?

I believe the SME sector is highly innovative and once a direction is clear, they will innovate and adapt. I believe the opportunities will include the opportunity for new trade deals, which are currently not possible. I also believe it will open new avenues for business that we cannot see yet – the pound has been weak which has enabled exports to grow, for example.

Graham Richardson, group managing director, Johnsons of Whixley, photo John Steel Photography

Graham Richardson, group managing director of Yorkshire-based commercial horticultural nursery Johnsons of Whixley, explains how he is planning to keep his business and his products growing through the Brexit uncertainty

Can you explain what Johnsons of Whixley offers?

Johnsons of Whixley is a horticultural nursery situated between York and Harrogate in North Yorkshire. Spanning 150 acres, the company is one of the UK’s largest and longest established commercial nurseries, with clients in a range of sectors from hospitality, retail and holiday parks to residential and leisure. We also provide plants for landscaping schemes involving major infrastructure schemes, supply more than 600 garden centres across the UK and we actively support good causes within the community.

Johnsons of Whixley grows a range of stock, from seedlings to extra heavy standard trees. The company is renowned for the quality of its stock, its expertise and customer service.

What preparations has Johnsons of Whixleys made for Brexit? 

In the last ten years, the horticultural industry has gone through a quiet staffing metamorphosis. Traditionally, our workers lived locally and aspirations were typically ‘secure employment in the locality.’ These workers have gone on to become our senior and middle managers via a combination of graft, commitment and expertise underpinned by schemes such as the apprenticeships of the late 1970s and 80s.

However, various factors have forced a radical overhaul of our staffing policy. Our once 150-strong full-time payroll has now reduced to 100, which has happened organically with very few redundancies. We now supplement the balance with seasonal workers who can react to seasonal and climatic peaks and troughs and who are prepared to put in a full day of manual work for a living wage pay cheque. These staff are European migrants in the main and have a significant capacity to work. Many of these individuals are settled in the UK; they are motivated and proud to contribute to and benefit from a vibrant economy.

We are not planning for a mass exodus of our European workforce – indeed, we have engaged the services of a specialist migration lawyer to help our staff prepare for any eventuality. Our permanent workforce is once again expanding, and we have provided clinics and workshops with a dedicated migrant worker lawyer to ensure the status of our staff continues to be assured.

However, from a business point of view, planning and strategising has contracted as there seems to be little point in a plan that spans more than a 12-month financial year.  A lack of confidence stifles investment and considered spending – UK business is currently operating in a vacuum of uncertainty and as a result, many significant long-term investment decisions are on ice.

What do you see as the main problems your business will face after Brexit?

The impact of currency has far more potential to influence the success of any year than incremental margin gains or losses. We adopt a cautious annual headline exchange rate and hope to do better via tactical forward currency purchases against a historically based schedule. In the event of no deal, we will have done everything in advance we possibly could and already have agreements in place to assist with the maintenance of imports – at a high and, at this stage, speculative cost.

Our long-established advanced supply chain reduces our exposure to climate change and seasonality – the British climate makes it impossible to grow everything we supply in this country.

What external support is helping you to solve the issues that Brexit has thrown up?

We have already made the necessary provisions for Brexit via our bank and HMRC. In addition, we have secured the advance services of freight forwarders as the passage of immediate and least resistance in managing documentation and compliance in a post-Brexit scenario. This will have to be reviewed as ultimately, this cost could become prohibitive.

What opportunities do you think Brexit will present for your business?

Our pre-planning has become something of an opportunity in itself. Statistics show that a significant percentage of businesses have so far done little or nothing to prepare. An increase in home production to serve the domestic market is the obvious response; however, this is viable only within the commercial context of a perishable product. For us, seasonality and the impact of an increasingly variable climate means attempting to grow our 60,000 list of inventories, with sales of around six million units, would amount to commercial suicide.

Our production commences 18 months in advance of supply, and we are unable just to make some more at short notice should we run out. Unfortunately, we need the ability to visit the European basket of available produce in order to meet demand.