At the time of writing, just what the terms of Brexit will be are still frustratingly undefined. Discussions are still going back and forth between the UK and the EU, only to meet with resistance by UK MPs on home turf. Yet the ads are still everywhere encouraging everyone to “Get Ready for Brexit on 31 October” – causing significant confusion. How should you, as a business owner, get ready for Brexit? It’s no surprise that in a recent round of surveys, the British Chambers of Commerce found that just 41pc of UK SMEs had even conducted a Brexit risk assessment, while a Bank of England research survey found that, on average, CEOs in the UK are spending one and a half hours per week planning for the EU withdrawal, and CFOs over two hours per week.

Business hates uncertainty, and the Bank of England research shows just how much. It has projected that the long-term impacts of this decision will reduce UK productivity for several years, and the lack of clarity is also having a significant impact on the economy’s overall growth – not to mention individual business successes.

It’s difficult to get ready for Brexit when we don’t know exactly what kind of Brexit we will have. Hard or soft? Staying in the customs union or exiting on WTO terms? What we can do, at present, is base business preparedness on previously suggested deals, projections for a soft or hard Brexit, and how a no deal situation will impact companies around the UK – all to help advise befuddled bosses on how to get their companies into the best possible position to respond.

>See also: HSBC adds billions to its £14bn small business loan fund ahead of Brexit

Brexit extension

Many companies may prefer an extension of the current status quo, even in the short term, to the likely outcomes of a No Deal. An extension of the existing state of play maintains the levels of frictionless EU trade through the customs union, and access to the single market. It’s the most “known” and defined situation for business plans but also keeps the levels of uncertainty in the market. Companies will still need to plan for various eventual Brexit outcomes.

Hard Brexit

This outcome is based on a negotiated settlement with the EU removing the UK from the customs union and the single market. It would likely involve a transition period to allow businesses to prepare based on the outlined details of the deal. A hard Brexit is likely to mean businesses face significant disruption from legal and trade perspectives, is this would mean dealing with a new border, and the customs, inspection, and tariffs which that brings. Regulatory process would also begin to vary between the EU and the UK – leading to considerations in both legal and regulatory compliance and risk management.

Soft Brexit

A soft Brexit remains an elastic term as it could mean a variety of conditions. Many of these function on the basis of a “strategic partnership agreement” – maintaining mutual market access and avoiding non-tariff barriers to trade for goods and services. Businesses would need to maintain the current full compliance with EU legislation and relations for all imported and exported goods and services with the EU single market. This would make it most likely that businesses would maintain harmony with current EU policies, just without the UK’s ability to shape policy, but divergences and adjustments would arise over time which would create barriers and delays.

No Deal

This would take the UK to a state of reverting to World Trade Organisation rules, any exports to the EU will be subject to EU tariffs. The UK would impose similar tariffs in return. It would also bring likely burdensome authorisation and certification for goods. The EU may no longer recognise many items which have been tested, certified or registered in the UK. In highly regulated sectors like pharmaceuticals, food and chemicals, this would cause significant disruption to business practice. Without a transition, businesses would have to cope with these demands immediately, and have No Deal contingency plans in place. However, businesses serving others within the UK borders would likely experience greater demand as they wouldn’t face the additional import/export hurdles.

See also: More Brexit blues – growth businesses that borrow from EU perform better

How to get ready for Brexit

All of these Get Ready for Brexit scenarios have different outcomes, and some are directly in opposition to each other. However, proactive businesses can tick certain boxes to be prepared and act quickly when the situation does clarify.

• Contracts should be reviewed, and assessed for unfavourable aspects and adjustments made, if possible, for future standard terms
• Contracts that include specific delivery dates or are contingent on the flow of goods and services over UK borders may encounter delays and additional certification processes. Adding in provisions for these timescales to fluctuate should be considered, as well as safeguarding against the business carrying the financial brunt of any such delays
• Customer contracts should also be considered, particularly regarding “Delivery Duty Paid” terms – which could mean the business as the supplier is responsible for any duty chargeable rather the customer
• Existing membership of “trusted trader” schemes, giving logistics and shipping priority at border controls and accelerated customs processes will also be beneficial, alongside the Authorised Economic Operator (AEO) status. For businesses in complicated supply chains, these could be especially helpful in the case of No Deal or hard Brexit outcomes
• Businesses will also need to make sure they understand the “economic origin” of products and items they sell or use, to understand the impact of zero tariffs at import, managing duty costs and any opportunities to claim reliefs on these items. This will mean companies need to understand where these items were manufactured originally and have all this information easily to hand. Depending on the trade deal, it could bring significant cost savings. Good preparation here will likely set businesses ahead of competitors when it comes to expediting export

Ultimately, business owners should know they aren’t alone. Their trading partners and existing suppliers, such as legal advisers, will all be able to suggest ways they can streamline for the various eventualities. We are already seeing this kind of information being shared between companies, with tips and advice passing freely. The biggest hurdle to overcome may be for those businesses who are simply adopting a wait and see policy to see which outcome emerges.

A Federation of Small Business study conducted last month found that the average cost of Brexit planning for SMEs was estimated at just £3,000. This price of planning could prove just a drop in the ocean when you consider the impact to trading based on the options which remain in play.

Christian Farrow is a partner at Acuity Law

Further reading on Brexit

Why Brexit could boost growth business investment in Britain