Brexit is going to happen. There will be winners and losers. Even though your business might be the “best in its class” with the best management team, best technology etc, it may simply be on the wrong side of the equation when Brexit happens, and no amount of re-structuring or business planning is going to change that equation.

Most businesses that will be affected by Brexit have started work on Plan A, i.e. preparing business plans to deal with Brexit. Some of these plans will work. However, some plans will simply not be financially viable. It is rare that we see a pessimistic business plan!

Some banks, such as Bank of Ireland, will now ask to see customer’s business plans for dealing with Brexit.

Whilst Plan A will work for some businesses, certain businesses should consider Plan B, i.e. either selling the business now, or totally existing the existing business sector and migrating to a new sector.

I recall advising an industrious sub-contractor to the construction sector in early 2008. He had built up a valuable company, but he was concerned about the “construction bubble“. He was determined to cash in his business before he became caught for bad debts. His biggest concern was that if he advised his customers, the Main Contractors, that he was exiting the business that they would not pay him for work being completed. We quickly concluded that he could not sell his business, given the nature of it, and that the best option was an orderly wind down. We devised a simple strategy: He added an extra 20% to his “normal” tender prices for new work, which meant that he did not win any new work. Within 6 months he had completed all contracts, collected all of his debtors, paid off all creditors and we then placed the company into a Members Voluntary Liquidation. He received over €1 million in cash. If he had stayed in the business he would have lost everything.

It is rare that we are given such advance notice of what will be a financial calamity for certain buisnesses. Time is now of the essence.

Whilst we are advising clients on Plan A, we are certainly keeping Option B on the table. In advising Clients on Plan A, we are encouraging them to avail of the €5,000 grant available from Enterprise Ireland for Brexit Planning: see https://ambition.enterprise-ireland.com/axuqhci/

If you have clients that are concerned about Brexit, they may contact me jim.stafford@frielstafford.ie or my partner tom.murray@frielstafford.ie to arrange a meeting to discuss options.