If you asked me on September 23rd, three months after the Brexit vote, whether there had been an impact on our business, I’d have said no. My rationale being that, since that fateful day, we had exported to 34 countries, from Saudi Arabia to Singapore, including 23 in Europe. So it seems my initial fears of exports slowing down were just a panicked reaction.
Having said that, three months isn’t a huge amount of time in the life of a business. Purchase decisions made pre-Brexit vote were the ones flowing out of the factory doors. The real test isn’t what’s happening three months on. It’s after a complete buying cycle which can be six months or more for many of our larger point-of-sale contracts.
Still, we remain confident: our business deals with some of the leading retailers and consumer brands in the world. They employ some of the most savvy and streetwise people you could imagine. They’ll know better than anyone that the UK remains open (and keen) for business.
I must warn you, I have a track record on being surprised by Brexit: I wrote (on LinkedIn) about my shock of how many members of our team felt because of the result of the vote. With colleagues from many nations we had questions on deportation, talk of how they felt fear and even non-white British born people expressing concern. I hadn’t seen that coming.
The next surprise came in the middle of October when one of the sales team travelled to Paris for client meetings. She had appointments with several well-known fashion retailers and brands. All have been customers for a number of years and all, without exception, had bought from us already this year. What she heard made me want to seriously rethink our export efforts.
The meetings were positive with good prospects of future business. Some new briefs to work on and a decent response to some of our recently prototyped new products. However, in three out of the four meetings, my colleague was asked whether they would still be able to buy from us in the future. The first time she heard this, she was somewhat confused.
Creating trade barriers
It turns out that these French customers were worried that the United Kingdom leaving the EU, and maybe the single market, would mean no more trade. Remember, these are current clients that are happy with what we do for them. Yet they were already starting the mental journey towards finding a ‘European’ supplier. They were beginning to create trade barriers, at least in their heads, because they feared the worse for the future.
I would add one more dimension to this. The product we sell, to many customers overseas, is a patented display product. Put simply, you can’t get anything like it anywhere else but from us. My worry is that if we sold a more ubiquitous product then we may not even get through the door to put a halt to these rather premature thoughts. We’re lucky but I imagine other businesses have struggled with this.
As a growth-focused business, exporting is a serious part of the plan and so takes up a decent portion of our strategic headspace. We’re looking to recruit in the US, discussing opportunities for partnerships or distributors in Europe and trying to figure out how we better supply customers in Asia and Australasia. What to do now, with this newly highlighted uncertainty?
As I see it, there are only really two options for us as an existing exporter. The first one is to sit tight and wait out the uncertainty. Pausing on making any new decisions or making any investments is a real option. That way, as and when we have clarity, we can regroup when we know what’s in front of us. For us this means business as usual but no US recruitment and less time on European business development.
The type of Brexit on the horizon
Slowing down the export activity feels like a non-decision. A weak move. Half hearted. But pressing on regardless could be reckless. After all, we don’t know what type of Brexit we’ll have and what the implications may be.
The problem is that if we wait for certainty it’s potentially too late. If I’m right, and people are already starting to think that the UK may be difficult to trade with post-Brexit, doing nothing will surely just sign the death warrant on our immediate export plans.
At this point, I’m reminded of a quote attributed to John F. Kennedy: ‘There are risks and costs to action. But, they are far less than the long-range risks of comfortable inaction.’ Or as my dad would tell me as a child: ‘It’s better to have tried and failed than failed to try.’
The second option is to keep with the pre-Brexit plans and press on despite the doubts. This is frightening, and potentially costly, as who knows what we will face in 12-18 months’ time. But, it was only yesterday that I was explaining to one of the management team my preference to accept sunk costs and not let them affect future decision making.
So, for me, the second choice is our only choice. Better yet, I think we need to go further and double down on our exporting efforts. We need to make more noise and to set people straight. After all, we are still part of the EU and will be for two years or more. After that, who knows?
What I do know is that if we are passive, and let others decide our future, then the risks are much higher than trying and failing. Our destiny is in our own hands. Just don’t sit on them; get out there and let the world know that the UK is still open for business. That’s what we’ll be doing.
Leon Edwards is managing director of www.Displaymode.co.uk.