For the small guy, the risks are now a big issue

The writing has been on the wall for some time now, but even for the slow adopters, the writing is now writ large.

For the small guy, the risks are now a big issue

The writing has been on the wall for some time now, but even for the slow adopters, the writing is now writ large.

A hard Brexit now seems unavoidable, following Tuesday's heavy defeat of the UK Government's proposal to exit the EU in an orderly way. The very unfortunate outcome of the Brexit vote takes us one step closer to a chaotic no-deal exit of Britain from the EU.

The issue for most Irish businesses who trade with the UK, and there are about 3,700 of them, is what to do now.

The signals have been consistent from the Irish government agencies - prepare now on the basis that the UK will crash out of the EU by the end of March.

But, only an estimated 535 companies have seriously prepared for this eventuality. These companies, typically, are small -- they are the small guys -- and have in excess of one-fifth of their exports going to Britain and have received, on average, €138,000 in funding to help them weather the worst of the Brexit crash.

That leaves the vast majority of Irish businesses still uncertain as to exactly how to plan and execute a business plan that will not damage their export sales.

The challenge should not be underestimated. There have been many turns and twists in the Brexit saga and much of the forecasts have not played out in reality. The much hyped forecast of a collapse in the value of sterling, if the Brexit deal was rejected by the House of Commons, did not happen.

Many foreign exchange specialists are still expecting Theresa May's Brexit deal to succeed in parliament on a second or third attempt, and this should spark a strong rally in sterling across the board.

Some Irish businesses will take this as a sign that this and other Brexit issues are political scares. Then, there is the other - and more worrying - issue exercising small businesses selling into the UK; the difficulty in finding customers for their product elsewhere.

The difficulty of finding new markets can be glimpsed from the statistics issued by both Enterprise Ireland and Bord Bia. Across all export sectors it has taken 10 years to reduce the dependence on the UK market by Irish indigenous businesses from 44% to 34%.

Assuming we continue with that scale of activity in finding new markets, the current trade promotional activity will only shift 1% of exports away from the UK into other international markets over the next 12 months.

The scale of the challenge must be radically looked at and the solutions re-engineered. And, right now, the biggest call is for added funding to accelerate the process.

Even if the budget for the current funding approved to assist the 535 companies exposed to the UK market, is extended to the other 3,000 companies that trade with the UK, we are looking at in excess of €4bn.

Shifting from the long-established British market is not going to come cheap and small businesses will struggle to handle a hard Brexit without massive state aid. It is now time to put the numbers on the table in Brussels. This is another bailout that will need EU help.

John Whelan is managing partner of international trade consultancy The Linkage-Partnership.

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