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.

The Federation of Small Businesses (FSB) is calling on the Department for International Trade and the Treasury to give small firms export vouchers to promote exporting in the wake of Brexit. Anna Tobin reports

The FSB is recommending that the Government issue vouchers up to the value of £3,000 to help small firms with exporting costs, including: investments in translation services, additional market research, and finding new clients through overseas trade fairs.

FSB research shows that the potentially positive impact of the depreciation in Sterling on exporters has been offset by the volatility in Sterling and the uncertainty surrounding a Brexit deal. It found that over half (53%) of smaller business exporters to the EU believe their business continuity and growth will be negatively impacted by a No Deal Brexit on Halloween.

Of those smaller businesses that export that have prepared for a no deal scenario, the average cost of preparations is £2,880, rising to £3,000 for those businesses that import and or export

“Exporting is a critical part of the British economy, especially to small firms hoping to expand and grow their businesses. But in order to succeed, it’s time that the Government stepped in and gave small firms the help that they need in order to realise their exporting ambitions,” said Mike Cherry, the FSB’s national chairman.

“The introduction of export vouchers up to the value of £3,000 will alleviate some of the strains that exporting firms are facing at the current time. Small businesses are being made to wait for the updated publication of the Government’s revised UK tariff schedule that would apply in the event of a no deal Brexit scenario, which must be published as a matter of urgency. This will allow smaller businesses to understand the terms on which they may be trading with the EU and indeed the rest of the world from the 31 October, in the event of a no deal scenario.

“The continued uncertainty is harming small firms ability to plan and prepare for the future with 40% of small business exporters saying that the uncertainty has had a negative impact on their future exporting ambitions.

“Around 21% of small firms currently export, but with additional assistance from the Government, FSB believes that those numbers could double.

“The use of these incentives will help on a number of fronts ranging from investment costs for items like translation services as well as additional market research and fact finding visits. These financial incentives are a great way to support our small firms that want to begin their exporting journey as well as those looking for ways to increase their exporting potential.”

The Association of the British Pharmaceutical Industry (ABPI) welcomes Government moves to restrict parallel exporting in the run up to Brexit. Anna Tobin reports

Parallel exporting is where companies buy medicines meant for UK patients and sell on for a higher price in another country, potentially causing or aggravating supply problems. The ABPI has been pushing for a restriction on parallel exporting for some time and welcomes the Department of Health and Social Care’s (DHSC) announced new restrictions on the exportation of certain drugs at risk of shortage.

“Companies have done everything asked of them to ensure that medicines get to patients in the event of a No Deal Brexit. This includes building and warehousing extra supplies of medicines,” explains ABPI director, Dr Rick Greville.”The decision to take precautionary measures to protect medicines supplies will be very much welcomed by our members. It means that these stockpiles of medicines which companies have built over previous months are better protected and available for use only by the NHS patients for which they were intended.

“In particular, we welcome the invite from DHSC for our members to identify when parallel export can lead or contribute to supply problems in the UK”

If companies feel that any of their medicines are being parallel exported, and that export could lead or contribute to supply problems in the UK, companies should contact the DHSC directly, setting out the name of the medicine, the concerns and any evidence to support the concerns. The DHSC will then assess the medicine against the criteria for restriction.

No business operates in a vacuum. We are all reliant on external suppliers for our products and services. If one link in your supply chain is not ready for Brexit this could seriously upset your own Brexit prep.

Unless the EU and the UK agree on a compromise to the existing Withdrawal Agreement, a no-deal Brexit on Halloween is still the most likely scenario. And having to move over to WTO rules will be the most significant challenge business will have experienced in decades.

Customs forms, proof of origin and VAT documents will all be required to trade with Europe in the event of a No Deal Brexit. If just one link in your supply chain is unprepared for any of these drastic changes to their operations it could have a terrible knock-on effect on your business.

To assess just how ready all those your business relies on are for a No Deal Brexit, carry out an audit of your supply chain now with the help of our Audit tool. BrexSure is a dynamic tool that enables you to ask the right questions internally and externally to assess your current state of preparedness. In turn, it will help you to highlight what needs to be done, and by when, to ensure that all parts of your value chain are prepared for Brexit.

Work together with your partners to help identify weaknesses and see what you can do to support each other through the next few months.

Anna

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.

The Government is not doing enough to support small businesses through Brexit says the Federation of Small Businesses (FSB). Anna Tobin reports

The FSB is warning that small businesses need more Government support if they are to adequately prepare for a no-deal Brexit on 31 October. The FSB’s research shows that 39% of small firms believe a no-deal scenario will negatively impact them and only one in five have planned or prepared for anticipated issues; while 63% don’t think they are able to plan.

The FSB research shows that the average cost for businesses that have prepared is around £2,000 and this rises to £3,000 for smaller businesses that export and import. While 31% of prepared small businesses have stockpiled ahead of 31 October and 34% report temporarily or permanently reduced profitability.

“As the risk of a chaotic no-deal Brexit on 31 October remains alive and kicking, it is worrying that many small firms have either not prepared or are finding that they can’t prepare,” highlights Mike Cherry the national chairman of FSB.

“Ongoing uncertainty is to blame for preparations hitting the skids with the picture still not clear as to how the UK will leave the EU on 31 October. Until we get clarity, small firms must prepare for the cliff edge where possible, and make preparations for a no-deal Brexit.

“Preparing for this outcome is coming at a high price though with small firms being hit by an unstable pound and having to shell out money on a potential outcome that has been highly disruptive, remains uncertain and is unwanted. Government must use what little time is left before 31 October to provide small firms with the support they need to navigate the uncharted and turbulent waters of a no-deal Brexit.

“Raising awareness is important, but not enough. The Government must also turn to meaningful financial support. This is desperately needed and would certainly provide a much needed shot in the arm for those firms that have already spent money preparing. For those firms that can’t prepare, we need broader support including cutting VAT and National Insurance, uprating the £3,000 employment allowance and extending the two year ‘retailers’ business rates discount of 33 per cent, to a wider range of smaller businesses.”

The latest monthly CBI Industrial Trends Survey has found that UK manufacturing output was flat in the three months to September and with Brexit around the corner the sector is not feeling positive. Anna Tobin reports