WHEN Elizabeth Carnahan handmade her first batches of organic fragranced soap almost 15 years ago, she sold them at craft fairs and farmers’ markets.

But she spotted a gap in the market for the sourcing and distribution of the materials required to make organic fragranced soaps, so decided to supply the soap-makers instead and Gracefruit Limited was born.

Today, with 21 employees and a turnover just shy of £1 million, Gracefruit’s journey from Carnahan’s dining room to premises in central Scotland has been impressive. Planning and forecasting has always been key to that growth, but it becomes much harder when a business is side-swiped by matters out with its control – like Brexit.

Exports make up just over 40 per cent of Gracefruit’s sales, and many components that go into their products – like sandalwood oil in fragrances, certain peptides in skincare raw materials, coconut oil and avocado oil – can’t be grown in the UK.

Carnahan says: “Honestly, it’s a nightmare! Brexit has caused all sorts of problems for my business and the businesses who supply me. With the sharp fall in the pound, we’ve seen our costs increase as the imported materials we rely on have gone up in price. It’s simplistic to think that a fall in sterling is good for exports – that only applies if your entire supply chain is in the UK. I can’t think of many industries that are able to source all of their raw materials from within the UK.”

Mitigating the impact of external factors is difficult, says Carnahan, but says some are easier to manage than other.

“Currency fluctuations can be somewhat mitigated by planning ahead. I now follow the commodities markets much closer so that I can act quickly if I see a sharp rise or fall in the price of things like cocoa butter, olive oil, or honey.

“But the effects of Brexit are impossible to manage because we still have no idea what kind of market we’ll have once we leave. The UK is going from working within the single market to becoming its competitor. I’m not sure how we’ll cope with that.”

Carnahan believes Brexit will have “a devastating impact” on her business. “As far as I can see, the Westminster government is doing nothing to plan for this eventuality. If all items entering and leave the UK will be subject to customs clearance, where is the infrastructure to deal with this? I’ve seen no evidence anything is being done.

“The same applies to our Open Skies agreement which keeps planes flying. Most people think of holidays abroad, but this also applies to time-sensitive products getting into the country.

“If membership of the single market and customs union are lost, manufacturing in the UK will suffer greatly because so much of it relies on supply chains coming out of the EU. Because we sell mostly manufactured goods, I’m not sure where we’ll be able to source these in future without having to deal with these barriers.”

Michelle Rodger is a communications consultant