For many, the hope is that Autumn 2021 will bring more normality and stability. However, this has obviously been an unprecedented year on all counts – socially, economically and technologically to name but a few. Businesses have had to remain agile and cope with sudden and really challenging conditions.
In reality organisations, markets, customers, suppliers have changed considerably over the last 18 months. So while many hope for a smoother ride in the months ahead, the landscape is very different to what it was.
Our September Business Club met less than one month from the start of the final quarter of 2021. Dean Hardy and Catherine Metcalfe from Shipleys facilitated the discussion which focused on how businesses can end the year on a high.
The session began with a poll of people’s outlook for 2021’s final quarter and how they felt their business would fare. Club members were evenly split between feeling business would be great, good or about the same in remaining months of 2021. Nobody felt it would be bad. Many businesses had already a good year and see the business pipeline looking strong for the months ahead.
Building on the positives
This echoed a number of positives that have emerged over the summer in business headlines:
- While the furlough scheme finishes on 30 September, in early August just 7% of the business workforce was on full or partial furlough
- The UK’s employment rate has been rising and it’s hoped the feared unemployment hike won’t happen.
- There’s a big recruitment drive in many sectors – May to July saw a record high of 953,000 job vacancies.
- Businesses are embracing a new hybrid and flexible working approach.
- Up-skilling in technology has transformed how people live and work.
- Business confidence surveys over the past month from ONS, GfK, CBI and Lloyd’s Bank have all shown rises in confidence among business owners that their business will survive and grow.
Many businesses have been on an incredible journey of transformation for the past 18 months. Some of the changes they’ve made are ones they’re keen to retain. They’ve also learned key lessons from the opportunities and challenges they’ve encountered.
Of course, it hasn’t all been plain sailing. Businesses have faced disruption in stock supplies and a shortage of staff in the pingdemic and also from the aftermath of Brexit and the pandemic.
How can businesses have a great end to 2021?
Club members then discussed how businesses could end 2021 on a high. They looked at this from different considerations:
- Employees – recruiting, retaining and making the most of the people in the business
- Operations and processes – retaining the benefits businesses have gained from the changes they implemented through remote working. Also how they develop further advantages in the hybrid working environment
- Markets and business offering – making the most of changes and fresh needs in their markets and customer behaviour
- Finances and liquidity – coping with the financial challenges and opportunities from the past and current trading environment.
Issues raised included the following…
Support of employee well-being is expected – it’s the norm, not the exception
One of the by-products of the pandemic has been the expectation that businesses have a responsibility to support employee wellbeing. Those that don’t factor this into their approach are likely to lose out – particularly in attracting and retaining staff.
A tough recruitment market will affect growth plans
Recruitment is particularly tough for many sectors and many Club members reported they were finding it challenging to fill vacancies. While the appetite to expand teams is prevalent, the shortage of candidates is making it difficult for businesses to achieve their growth ambitions. It’s also important to get the onboarding approach right in the new hybrid working environment, so new team members integrate smoothly and feel motivated to stay.
Reconfiguring business premises
As more businesses embrace the hybrid working environment, how a business utilises its premises will evolve. For many a physical space is still required, however, the nature of that space is likely to adapt as more employees rotate between working on-site and from home.
Club members anticipated that premises will be reconfigured to facilitate more collaboration among team members when they’re on-site. See also our previous Club discussion about business considerations for the hybrid working environment.
Expect further ‘focused’ pivoting
The lockdown restrictions prompted many businesses to pivot and develop fresh business offerings to capitalise on changing market behaviour and conditions. A big growth area has been in developing new online offerings and a focus on satisfying niche customer requirements. This has helped a number of businesses to be successful in establishing new products and services.
Managing rising costs will be a challenge
The pandemic led to significant cost reductions for businesses and this in turn helped some build up strong cash reserves. As a more ‘normal’ trading environment returns – and particularly as businesses return to their premises – it’s anticipated that costs will rise.
On top of this, shortages of supplies, a pressure to raise wages to retain staff and higher energy prices will put pressure on businesses’ cost management. Many also need to start preparing for increased tax rises ahead (National Insurance Contributions, Corporation Tax etc).
Cash flow forecasting on a regular basis will therefore be crucial. Also consider introducing regular stress testing to assess how the business will cope with different debtors and creditors scenarios.
Access to finance is still possible
Specialist grants and raising finance through loans are however still available – both via the traditional bank route, or special niche providers. The Recovery Loan Scheme is helping a number of businesses in the current climate.
Digital transformation will continue
The pandemic has brought about a digital evolution with most businesses embracing new technologies and upskilling the digital skills of their people. In the coming months that transformation will continue as businesses consider how they can further digitise and repackage their products and services in a completely different way to capitalise on new markets, or greater efficiencies. A lot of the investment is already being spent on automation, outsourcing and artificial intelligence.
The Autumn has begun positively on a number of fronts for many businesses. There are considerable challenges which businesses are having to navigate if they want to achieve their growth ambitions for the end of the year. It will be interesting to see how well the positive mood and ambitions of many businesses will help them overcome the obstacles along the way.
If you would like to join our future Business Club events, please contact the Shipleys’ Godalming team for more information.