Britain may not be in the euro, but that doesn't mean the new currency won't affect your business
In just under six months' time, on 1 March 2002, the euro will officially replace the franc, the mark, the lira and many of the other European currencies we have come to know and love. The pound remains – for the moment at least – but even so, the UK construction industry needs to be prepared for the changes that conversion to the euro will bring.

The euro is being introduced in 12 European nations: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. These countries, which have locked the exchange rates of their national currencies to the euro, make up the "eurozone". From 1 January 2002, the 12 countries will be in a monetary transition period. This means that until 29 February 2002 – when the transition period ends and the euro becomes the sole currency – those dealing with eurozone countries can use their existing currencies as well as the euro. After that, all those domestic currencies we have become familiar with will be withdrawn.

For UK businesses, now is the time to identify euro-affected business and plan how to manage it effectively. If you are fully prepared to trade in euros before your competitors, you will gain a significant advantage. But if you neglect the euro, your clients may look to your competitors who are able to handle their business in the new denomination.

If you sell to eurozone countries – or elsewhere internationally – you will be affected by the transition to the euro. For a start, you will need to be able to quote prices in euros. Another serious issue to consider is that the euro will cause prices to become "transparent" across eurozone countries. For example, you may presently be able to sell a product for different prices in Germany and Italy as a result of their different currencies and exchange rates, but the adoption of the euro will make any price difference visible to all.

Looking ahead, you will also have to consider alterations in product labelling as well as product size or design. You may also find it necessary to convert price points into euros on your price lists, catalogues, invoices and so on.

The impact of the currency will also create new supply chain requirements. Eurozone businesses may request payment in euros, and international companies with which you trade – even those based outside the eurozone – may want the business partners in their supply chain to deal in the new currency.

If you neglect the euro, your clients may look to your competitors who are able to handle their business in the new currency

If your accounts include transactions in European currencies, these will have to be changed into the euro – and the sooner you make this transition, the better. Your business partners in the eurozone may want to be invoiced in euros, and some vendors may already prefer payment to be made in euros instead of the currency they are using now, as they themselves gear up for the switch.

The conversion to the euro is likely to have an impact on many businesses' IT systems. You may have to invest in new hardware or software, and many of your databases and processes could have to be changed or converted to cope with the new currency and the demise of the old. And you will also need to consider your clients: any changes that they make could affect you.

Contract language and terms could be another area affected by the adoption of the single European currency. If your business has any contracts with multinationals, you must be aware that these companies could switch to trading in euros before the contract ends. UK businesses will need to review current contracts and begin dialogue on upcoming ones. Here again, well informed professional advice could save many businesses a lot of aggravation. All these possible changes may require significant effort and budget.

As if identifying, assessing and managing these risks was not enough, you also need to remember that you do not exist in a vacuum. The fact is, whether the UK is in or out of the euro, UK businesses need to be able to trade with the eurozone when the currency comes into play on 1 January. If you are not ready, your better-prepared competitors will gain an advantage.