By Stuart Ramsden, Head of Commercial for Atradius UK and Ireland

 The result of last year’s UK EU referendum sent shockwaves throughout Europe. The value of the pound plummeted overnight and predictions of economic decline were rife. However, in the months that followed, economic performance remained relatively stable, but, as the clock continues to tick, and ‘divorce’ proceedings get underway it seems that neither side of the negotiating parties is closer to understanding what the split will truly entail or what its impact will be. Of course, in the meantime we cannot – and should not – stand still and we have seen a marked resilience amongst British firms who have had little option but to adopt a ‘business as usual’ mentality. Now, as the countdown to Brexit continues, cracks are beginning to materialise and in the commercial world preparation is becoming increasingly important in weathering the storm from any potential fallout.

Positively, the question mark raised over future trade deals with the EU is helping the UK to realise new opportunities. Thanks to its close proximity and trade links, Europe has traditionally been an attractive trade destination for UK businesses and certainly often chosen as a first step into the export market. However, international trade should not be limited by geography and horizons of UK firms have been widened; now seeking new trade partners and opportunities across the globe. With export long hailed as the foundation of growth, this is a major boost to UK businesses. In addition, the devaluation of the pound brought further reward to UK exporters who quickly became perceived as more affordable for overseas customers. With the ‘Made in Britain’ label holding a strong international appeal, this is a combination which has paid dividends to businesses who have capitalised on the changing climate to increase orders, attract more customers and branch out into new markets with a financially competitive edge.

On the other side of the coin is the impact the pound’s devaluation on importers. The pound’s sudden decline immediately pushed up the cost of imported goods which, coupled with the recovery in oil prices in the last year, has served to drive up prices. This is especially bad news for some manufacturers, such as the automobile sector which uses significant levels of imported components and also for the construction sector which relies on imported materials. However, with price rises a widespread industry issue, there has been a degree of acceptance within the market and once the major companies increased their prices, others quickly followed suit. Promisingly, this acceptance is accompanied by a degree of resilience and also innovation, limiting the impact and even presenting an opportunity to push for growth.

New strategies have been implemented to protect business such as a stringent monitoring of supplies so that stock does not build up, risking being hit by future currency fluctuations. And once the stock is available, firms know there is potentially a short window to make monetary gains and are acting faster and smarter. Savvy firms are making a concerted effort to leverage opportunities, to win new clients and to make more sales and increase profits.

While we’ve seen hard work pay off, it’s important to note that success has gone hand in hand with caution. Businesses are increasingly being proactive in taking steps to protect themselves and limit their risk exposure wherever possible. New opportunities may well be being seized but only once the potential outcomes are given full and timely consideration. This changing mentality to global trade is both applaudable and entirely necessary; it is in fact an advantage that businesses are becoming progressively risk averse, putting in place greater protection from the inherent risks of global trade alongside any potential Brexit fallout.

The biggest risk from the uncertainty that Brexit brings is one which is all too familiar to businesses; the risk of non-payment, whether through broken trade deals, currency fluctuations, political ramifications, economic decline or customer insolvency. In the UK, insolvencies have been increasing since Q3 2016 with Atradius economists predicting a 6% rise in insolvencies this year and 8% next year. A decline in confidence and the subsequent increasing uncertainty in the economy has a knock-on impact on the trading landscape. However, keeping trade links open is key to stimulating the economy and vital for future success. Whether the sales territory is new or familiar, there are always risks; Brexit, with all that it entails, is simply another risk to manage. Businesses need to remain alert to the range of risks that might affect successful trade and ensure that they are adequately protected in order to futureproof themselves against any prospective loss. With the right strategies, risk savvy businesses can adapt and continue to thrive and not let the changing trade environment inhibit their ambitions for growth.

Alongside all of this, an in-depth knowledge of your customer and the wider market is crucial. When it comes to accessing information, trade credit insurers are a valuable resource; with expertise in markets around the world and business intelligence on millions of companies, your credit insurance partner can connect you to the information you need. Trade credit insurance not only protects businesses from non-payment but also helps exporters gain that all important competitive edge, while also reducing red tape and the risks associated with trading overseas. In particular, with the security to trade on open account, an insured business has the agility and flexibility to better compete in the market.

We’re already more than 14 months into Brexit with another long-term stretch of negotiations ahead. However, as the landscape changes, the need to manage risk becomes increasingly critical and the role of trade credit insurers is key. ‘Business as usual’ may seem to underplay the concerns of those facing trading challenges, but supporting customers to manage risk and enable trade is what we already do every day, so whatever the post Brexit world looks like, trade credit insurers will be continuing to deliver solutions. And in the meantime, business is certainly not going to stand still and wait for Brexit to bite and so business as usual is very much the focus.

Looking forward, nobody can predict with complete accuracy exactly what the trading landscape will look like in the post Brexit era. But whatever changes the future brings, if you’re armed with information and well prepared, you can mitigate against the risks and reap the rewards of new and successful trade relationships.