Brexit: What’s next for Irish business

Negotiations between the UK and the EU over Brexit are at a critical stage. What do the developments mean for the future of the UK's relationship with the EU and what are the implications for Irish business?

This is a critical stage in the Brexit process

Since the start of Brexit negotiations in June, October’s EU Summit was expected to be a major milestone in the negotiation process.

It was hoped that negotiations on the critical areas of the financial settlement, citizens’ rights, the status of Northern Ireland and the border with the Republic would be advanced enough to allow the next phase of discussions to begin.

That agreement has not been reached, but EU leaders have started internal discussions on their approach to the second phase: the transition to Brexit and future trade arrangements.

What does this mean for the UK’s future relationship with the EU, and what are the implications for Ireland and Irish businesses?

What do you need to do now?

Time is marching on and Ireland is still grappling with uncertainty. Given this, the hard Brexit that we recommended companies plan for in March remains a prudent assumption.

While there is uncertainty around Brexit and the final outcome of the process, it is good practice for businesses to perform ongoing health checks. There are many uncertainties but proactively planning now, starting with a fitness test of your current business model with Brexit in mind, will help you be ready for whatever the outcome will be.

Step 1: Create baseline assumptions

Each organisation should be able to quickly define a set of basic assumptions to inform their Brexit planning. Everyone in the organisation needs to understand and use the same set of assumptions in all planning and strategy work. Keeping your assumptions concise allows for straightforward periodic reviews and simple modifications of assumptions as the Brexit landscape becomes clearer.

Step 2: Analyse your business

Using these assumptions, work through the core elements of your P&L. What are the impacts of the assumptions on your operating model? What is the impact on your cost base? What impact will there be on your working capital requirements? This allows you to assess the financial impact on your business and highlight where the areas of greatest risk are.

Step 3: Define your Brexit action plan

Once you have developed your detailed risk analysis based on your assumptions, you should be able to identify the areas where changes will most effect your organisation and develop suitable mitigating actions to reduce the impact of Brexit on your business.

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