Around three months on since voters in the UK decided to leave the EU, some of the impact of such an historic decision is beginning to be seen across many businesses.
A lot were prepared for any outcome from the referendum and have dealt well with the immediate sense of uncertainty Brexit has provided. While others have struggled to make the necessary changes.
Even though there could still be a couple of years before the UK actually leaves the EU, there are many ways businesses in the UK are already adapting.
Job Cutbacks
Just as the UK unemployment rate was heading in the right direction, the Brexit result was announced and threw everything into uncertainty. Already a few major companies such as Virgin and Ford have claimed the result has led to the cancellation of deals that would have created thousands of new jobs.
The governor of the Bank of England has also warned that 250,000 people will lose their jobs as a result of Brexit in the next two years. This is a drastic way in which many businesses are preparing to adapt to changes in trade and other impacts from the referendum.
Increasing Prices
In the week after Brexit, sales on the high street slumped in reaction to the result. Along with a weaker pound and fewer shoppers as they worry about the overall financial impact of Brexit, this has been bad news for businesses that sell products, especially on the high street.
To counter this, a number of companies have already been seen increasing their prices to avoid losing as large a profit. The pound may have recovered slightly since then, but it could easily drop again and businesses could continue to increase prices.
Business Financing
Another way a number of companies have adapted to the drop in profits and financial challenges Brexit has brought about, has been through the invoice financing services that companies such as Secure Trust Bank provide. These have helped maintain a smooth cash flow, allowing for growth and day-to-day tasks to still be completed efficiently.
Other business financing methods have been used by a lot of companies, including loans and invoice discounting, to avoid financial difficulties. For some they will hope these are just temporary measures before business and the pound picks up again.
Safeguarding Strategies
Other businesses are seeking out fresh financial strategies to protect their assets, such as forex hedging to guard against the weakened pound. This is a safe option, especially as a lot of uncertainty still remains, and when the UK does leave the EU officially such volatility surrounding its value will return.
For companies that have the finances, there are other markets they could put profits in to avoid them losing value along with the pound. Precious metals, commodities and more all offer such an outlet for safeguarding profits in the post-Brexit world. Â
Leaving the UK
There were many global corporations that warned they would move their businesses out of the UK should voters choose to leave the EU. Vodafone, Visa and a few others have claimed they may relocate their headquarters elsewhere on the continent in light of the result.
This would be in the hope of making trade with other EU countries a lot easier and more beneficial than working in the UK and outside of the EU. Leaving the UK would result in more job losses and be detrimental to the economy too. Either way, this change is proof of businesses in the UK adapting to Brexit.
