Dealing with change is something that we, as business owners and CFOs, contend with on a daily basis. With the Brexit result it's obvious we're heading into uncharted waters.
The uncertainty will continue for some time. So, here are our 10 tips to help navigate the risk and grasp the opportunities in a post-Brexit era:
1. Look to the long term. Regardless of the future economic relationship with the EU, business will continue. Remember this is the age of a global economy.
2. Don't act out of fear. According to the Deloitte UK CFO Survey Q2 2016, just 8% of CFO's think it's a good time to add risk to the balance sheet. It’s important to remember that some of the best opportunities can appear in the midst of mass uncertainty. You only have to look back to the Great Depression and other tumultuous times. Fantastic businesses were set up like Walt Disney Pictures, Duracell, Porche…
3. Be conscious of psychology. This is reflective of point two above. Deloitte points out that markets haven't 'interpreted Brexit as a financial crisis.' Instead, the vote had influenced 'perceptions of uncertainty.' Don’t get pulled along with the crowd. Remain focused on uncovering opportunities and where there is a genuine risk, to mitigate that.
4. Separate fact from fiction. What are the facts around Brexit that are - or could - impact your business? Do you import or export to Europe only? Have people stopped buying your products or services? Are clients holding off investments? A fact-based approach will help you make better decisions.
5. Focus on what you can control. Yes, be aware of the issues that are outside this but realise that you can’t control events. You can control how you react to them – and what you’ll do next…
6. Plan well, but remain agile. Review the likely outcomes and how you're going to respond in each given situation. We all know the Benjamin Franklin phrase: “If you fail to plan, you are planning to fail!” It’s grounded in truth. And even though plans need to be adapted, you’ll be in a stronger position as a result.
7. Pay attention to process. What's working and not working in your business? If you do nothing else in the interim, make sure you fix or eradicate any old processes in your organisation. You need to be able to move quickly – and that means there’s no place for inefficiency.
8. It's time to innovate. This doesn't just apply to your products or services. It applies to every part of your business. How can you improve the finance function? Or customer service? What other commercial opportunities are there? If you're raison d'etre disappeared tomorrow what else could you do? This can give rise to some serious opportunities.
9. Know your financials. Pretty obvious. But right now do you know how much money is committed to the business? What’s the state of your cash flow? Which products or services are about to make a loss? Are you about to lose an important customer? What impact will that have? Make sure you have the technology and business intelligence in place to support your efforts.
10. Lead from the front. As a CFO or Finance Director, it's important to mitigate risk. It's also important to know how and when to invest your capital for the best return. And that includes in uncertain times. Recruiting staff, investing in technology or opening up an office in another country. If you're waiting for the right moment opportunities will pass you by.
We all have to make decisions with incomplete facts. Nothing’s perfect. It's part of business. Brexit is a case in point. Over the coming months and years, some of the predictions may play out. And some won’t. One thing’s for sure, in ten years from now we’re bound to be dealing with another major event