With supply chains just beginning to recover in the wake of COVID-19, the UK’s imminent transition from the EU presents new risks and opportunities in equal measure. GC Business Growth Hub Manufacturing Advisor Nick Brandwood explains what importers need to do to prepare, and how to build a supply chain strategy that’s fit for our post-EU future.

There’s been a lot for businesses to deal with over the last few months, and we’re not quite finished yet. With the impacts of COVID-19 on global supply chains now beginning to ease, importers must turn their attention to the UK’s imminent transition from the EU.

If you import goods from the EU, it will pay to start planning now. Fail to prepare and you could well find yourself swept along in a sea of confusing new rules, border delays and disappointed customers. Get it right and you will have a huge opportunity to increase profitability and gain competitive advantage. Events of this scale usually only come along once in a generation. Granted, we’ve had the pleasure of dealing with two this year, but you know what they say – when life gives you lemons…

First things first: familiarise yourself with new requirements

COVID-19 was a surprise; EU Transition is not. There is guidance out there to help you prepare in advance – we’ve compiled it together in one place.

A brief summary: On 1 January 2021, the EU Transition Period will end. From this date, regardless of the outcome of final negotiations, the UK will operate a full external border with the EU and new controls will be placed on imports coming into Great Britain. The controls will be brought in over three phases:

From January 2021: Importers of standard goods (which excludes ‘controlled’ goods like alcohol and tobacco products) will need to prepare for basic custom requirements, including keeping sufficient records and deciding how to account for and pay VAT. Businesses will then have up to six months to complete customs declarations, and customs duties payable under the new UK Global Tariff regime can be deferred until submission.

From April 2021: Products of animal origin, regulated plants and plant products will require ‘pre-notification’ and the relevant health documentation.

From July 2021: Importers will have to make full customs declarations and pay relevant tariffs. Full Safety and Security declarations will also be required from this date.

To be able to complete customs declarations, you must get an EORI number and decide whether or not to use a customs intermediary. If you want to make declarations yourself, there are government grants available for the training and IT improvements required.

That’s a very simple overview – more information is available via our EU Transition portal.

Build your supply chain strategy

Like the COVID-19 crisis, the EU Transition process presents a whole pot of new risks to your supply chain. You could face delays and disruptions at the border, be let down by overambitious suppliers, find yourself being asked to accept poor contract terms or end up with too much cash tied up in stock. How you manage and mitigate these risks will determine your profitability; by managing them with the right strategy you will be able to operate more effectively than your competition and gain the upper hand.

Luckily, the lessons learned during the current crisis will put you in good stead. Over the last couple of months I’ve been delivering supply chain strategy workshops as part of our Strive and Thrive webinar series. In these sessions I talk about how to identify and mitigate risks within the supply chain, many of which apply to EU Transition as easily as they do to the pandemic.

The trick is to map out your full supply chain to identify areas of high risk/opportunity, and then develop a strategy that applies suitable tactics to minimise each risk and maximise profit. Segmenting the elements of your supply chain based on how much they influence the profitability of your business and how much risk they present to your business will help you to identify the appropriate tactic:

Remember: your strategy doesn’t have to be perfect, just better than the competition. Make sure you review it regularly – you only have to look at the last few months to see how rapidly things can change.

Communicate with your suppliers

Engage with your overseas suppliers now to discuss how to work together going forward and whether to expect delays or logistical changes. You also need to ensure both sides understand incoming rules for relevant commodities and have the right resources in place to complete new customs procedures.

Existing contracts should also be reviewed to see if the legal responsibilities and requirements of each party are affected. You can refer to international Incoterms rules for guidance.

Consider whether importing remains the best approach

Depending on the products or components you import, part of your supply chain strategy could involve reshoring supply to UK. This is a process already underway for a lot of manufacturers looking to reduce supply chain risk in the aftermath of COVID-19.

It’s a tactic that requires careful thought, and isn’t suitable in all cases, but when done successfully it not only removes risk but can improve profitability as well. Appreciation that we have an under-utilised manufacturing base in the UK is growing, with more and more businesses and consumers willing to pay a premium for British-made products. In fact, a recent survey found that three quarters of businesses are more likely to buy British post-pandemic.

Shortening your supply chain also has environmental benefits, which is a risk factor that will be increasingly important in the coming years.

As always, make sure you assess any new suppliers to ensure that they meet all the required standards.

Support is available

GC Business Growth Hub has established an EU Transition Initiative to provide reliable facts, insights and practice advice. As part of the initiative, there’s a dedicated information portal, including an online toolkit that provides tailored guidance for SMEs:https://www.businessgrowthhub.com/eu-exit

We’re re-designing our services to help you​

As we emerge into this brave new world post-EU, we’re busy looking at new ways to aid business resilience and help you plan for the future. If you need help with any of the issues raised above, contact us and one of our specialist Manufacturing Advisors will be in touch.

Explore our manufacturing services

There is also a new support programme specifically for manufacturers, Made for Manufacturing. The programme is delivered entirely online, with virtual tours, expert speakers, peer-to-peer learning and one-to-one support from a specialist Manufacturing Advisor to put you in the best possible position for the future https://www.businessgrowthhub.com/manufacturing/Made-For-Manufacturing

How Manchester Business Owners Can Protect Themselves Financially as the Tier 3 Threat Looms

The COVID-19 pandemic has affected the world economy in a number of huge and unprecedented ways. Most of us have never been through a period in time where everybody has been asked to stay at home to work remotely if possible – or even not work at all. Social distancing measures have become the norm with the primary goal of flattening the curve and reducing the spread and health effects of the virus.

But for businesses, it has had a huge effect – particularly on those in the retail, hospitality, catering, travel, education and entertainment industries. Business owners in Manchester are in a strange position right now as they prepare for the possibility of a Tier-3 lockdown just before Christmas, typically one of the busiest periods of the year. If your business will likely be affected again by stricter lockdowns, here’s what you can do to protect yourself financially.

Come Up with a Backup Plan

Nobody wants to be out of an income and the good news is that it might be possible for you to put together a backup plan that involves making some changes to the way that your business is run in order for it to continue thriving. This was quite common during the first national lockdown when we saw a number of retail businesses scramble to offer online services. If you sell products from a brick and mortar store or run a restaurant, getting online is the best thing that you can do to protect your income right now – and the best news is that setting up a business website has become easier and cheaper than ever.

Negotiate with Creditors

During the first lockdown there were grants and emergency funding given out to help business owners continue paying back business debts and paying the rent on premises that they were not able to use. But while Greater Manchester leaders are pushing back on the government’s request to go into Tier 3 lockdown without this type of funding, it’s impossible to be completely sure whether or not the UK government is going to provide Manchester with the same type of support if we need to go into lockdown for a second time. It might be worth negotiating with any business creditors that you have toinform them of the situation – chances are that you are not the only business owner in this boat, and creditors may have measures in place to support you such as allowing you to freeze repayments or make reduced payments until things start to get back to normal.

Consider Responsible Borrowing

If the COVID-19 pandemic has left you on a reduced income, you might have considered the option of borrowing money to help you cover your personal expenses for the time being. But if you don’t have the best credit rating, this might be difficult to achieve. New Horizons is a short-term loan broker that will help you find the best loan for bad credit. New Horizons also offers a range of informative articles and guides to help you make sure that you are borrowing as responsibly as possible while avoiding putting yourself in further financial difficulty. You can find loans that are repaid in full on the next payment date or spread out across a number of months.

Reduce Business Expenses

If your business has to close down for a Tier 3 lockdown, it’s worth considering which expenses you have to continue paying and which you can get rid of for the time being. For example, any offline marketing that directs potential customers to your brick and mortar location might be worth cancelling for now until they are of use to you again; if you’re setting up online then that money is probably better off spent on building your online presence and letting your customers know that you’re still around but with a different way of doing things.

Consider Starting Something New

If your business is in an industry like entertainment that would be difficult or impossible to set up online quickly, it might be worth the option of considering starting something new to help you make it through the pandemic. Many business owners have been successful with a completely new venture while their original company had to close. It’s worth considering new business ideas that could be set up quickly and are likely to be in high demand right now, such as food delivery services or an online store for face masks, hand sanitiser and other pandemic essentials. If you have a skill like web design or writing, you might be able to find some freelance work online to keep you going until your business can get back to normal.

Along with being aware of any financial support that is available to you, keep these ideas in mind to help you and your business stay afloat during these uncertain times.