Businesses have spent much of the past ten months hastily adapting to extraordinary circumstances. While the fight against the COVID-19 pandemic is not yet won, with the vaccine roll-out fully underway in the UK, there is hope, and what we do now will help pave the way for the future.
2021 will be the year of transition. Excluding any unexpected tragedies, individuals, businesses, and society can start to look forward to shaping their futures rather than just grappling through the present. The next normal is going to be different. It will not mean going back to the 2019 society state. Indeed, just as the terms “pre-war” and “post-war” are used to describe the 20th century, generations to come will probably discuss the pre-COVID-19 and post-COVID-19 eras.
The entrepreneurs and innovators
The crisis has sparked a wave of innovation and has launched a generation of entrepreneurs. Young people have been among the worst affected by the coronavirus pandemic. Visions have been halted, and future career prospects have felt unachievable due to the grim condition of the job market. But for some, it’s been the push they needed to start their own businesses. In 2020, the UK saw 85,000 more companies being set up compared to 2019. However, it‘s been a challenge with one in seven enterprises telling the Office for National Statistics they had little or no confidence of surviving the next few months.
A survey of 1,500 self-employed people published in November 2020 found that 20 percent said they are likely to leave self-employment when they can. As large established businesses commence recovering and rebuilding their workforces, they need to encourage and promote entrepreneurship and innovation in order to attract and retain this cohort of talent. Alternatively, business owners should consider how these start-ups could complement their established model – perhaps by considering business mentorship or joint partnerships. These existing entrepreneurs could be valuable assets to your businesses.
The techies
During the COVID-19 crisis, one area that has seen significant growth is digitalisation, meaning everything from online customer service to remote working with customers and suppliers, to the use of artificial intelligence to improve operations.
There’s no going back. The great acceleration in the use of technology, digitalisation, and new forms of working is no doubt going to be continued.
More positively, in the past, it’s taken a decade or longer for advances in robust technologies to evolve from innovative things to productivity catalysts. The COVID-19 crisis has sped up that transition in areas such as AI and digitalisation by several years. A McKinsey Consultancy survey published in October 2020 found that companies are three times likelier than before the crisis to conduct at least 80 percent of their customer interactions digitally.
With these advance business owners need to consider their technology plan carefully, set aside robust budgets, and ensure that they’re able to recruit and attract the IT skills required to develop and implement future platforms.
The homeworkers
Before the COVID-19 crisis, the idea of remote working was a topic of boardroom debate but not proceeding very far or fast. But the pandemic changed that, with tens of millions of people transitioning to working from home, essentially overnight, in a wide range of industries.
It’s happening not just because of the COVID-19 crisis but also because advances in automation and digitalisation have made it possible; the use of those technologies has accelerated during the pandemic.
There are two significant challenges related to the transition to working away from the office. One is to choose the role of the office itself, which is the traditional hub for creating culture and a sense of belonging. Businesses will have to make decisions on everything from commercial office space considering “Do we need this building, office, or floor?”, to workplace design, “How much space between desks?”, to training and professional development “How can be embed remote mentorship?”.
Returning to the office can’t mean simply unlocking the door. Instead, it will mean unlocking a wider reconsideration of what exactly the office brings to your business, customers and employees.
The small business owners
On the whole, the COVID-19 crisis has been devastating small business. Whilst government grants have been available, many small businesses, from restaurants and bars to hairdressers and guesthouses, made business interruption claims from their insurers after the coronavirus lockdowns left them unable to trade. A large majority of UK insurers relied on technical legal arguments to wriggle out of their responsibilities and failed to make payments. In November 2020, the Supreme Court heard claims brought by the City Watchdog over these blanket rejection claims. Fortunately, the Supreme Court supported the claims which has led to the insurance industry pay-out of over £1.8 billion in COVID related claims across a range of products, including business interruption policies. It’s therefore safe to say that having insurance pays!
Make a plan
The last year has confirmed the crucial significance of forecasting. Small businesses must put a cashflow together that shows what the business has in reserve and what it may need. This should be tested using different ‘what if’ scenarios to demonstrate the worst case. This will provide business owners with the tools to make decisions on all areas, including people, stock and premises. If a business is facing cash flow pressure, there’s still time to look at the CBILS or Bounce Back Loans. However, these are loans and not grants, so they will need to be paid back.
Retain your brand
Many small businesses have been forced to identify new ways to reach their customers, whether online, through social media or other sales channels. If you have had to close due to lockdown, ensure that your brand remains intact. Use every means possible to spread the word, from social media to direct contact whilst trying to get customers to become brand ambassadors and share testimonials.
Is now the right time to sell?
The Government will have to pay for the measures that they have brought in to support businesses, and there has been much discussion over the potential rise in Capital Gains Tax as one method. This could mean as much as a 35% increase in the tax that a business owner could pay on selling. Small businesses who may have been contemplating a sale or cashing in should, in the short term, think seriously about this whilst the rates remain low.
If you’re considering what to do now to protect yourself in the future, please get in touch to arrange a free, confidential 60-minute business consultation, email mj@pcwconsultinggroup.com.
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