For some small businesses the impact of Brexit and the falling pound has already been felt. If you import your goods, have overseas supplied or work in the travel industry you will already be feeling the pinch of the de-valuing point.
However the reality is that for many small owner-managed businesses the impact hasn’t really been felt yet.
Over the coming weeks and months it is possible that many business owners will begin to see the effect of the falling pound trickle through to their business.
Take oil for example. Oil is traded in US$ – which makes buying oil now more costly As a result transport costs will increase which will impact the cost of all goods purchased. You are then faced with the difficult decision as to whether pass on price increases or absorb the costs and have a lower profit margin.
As it looks like the value of the pound won’t be recovering to pre-brexit levels any time soon now is the ideal time to forecast the potential impact that the falling pound could have on your business.
To ensure you are prepared we recommend that you prepare profit and loss forecasts based on costs rising by 5%, 10% and 15% to see what affect this will have on your margins. This will then put you in the best position to plan for your business and make a crucial decision as to whether to increase your prices.