Is 2021 the year of opportunity?
Let us be under no illusion, the last 12 months have been extraordinary.
We have seen the implementation of multiple lockdowns, the uncertainty of entire sectors prevalent for months on end and only now are we seeing a roadmap back to normality in the UK. However, as experience tells us, nothing is certain, and macro-factors can at any time significantly change the landscape once more.
The impact hasn’t just been on company profits, but also, and possibly more importantly, on personal circumstances, families and the overall wellbeing of not just the UK, but the entire world. Everything seems to have been challenged during this period, and many questions asked of ourselves whether it be our business life, goals and aspirations or our social interaction with the wider environment we exist in.
Many people we have spoken to believe that their mindset has changed permanently, and who would blame them?
One thing though is for sure, those businesses that have been able to navigate successfully through this period of uncertainty are now finding that 2021 may well be the land of opportunity. However, defining ‘opportunity’ is the key differential.
We have seen various themes of thought from discussions with business owners:
- Keep calm and carry on – with the support of various Government schemes, businesses are either on hold or are continuing as best as they can under the current circumstances. Whilst this may be the less ‘aggressive’ option, it may be the most difficult in the current environment, especially as competitors or new market entrants may be bold in their actions.
- Pivot – many businesses have evaluated their current operations to assess the viability of current products, markets and the relevant associated cost-base to emerge as a leaner and more effective business going forward. The last 12 months may have triggered a belated business health check and such businesses have pivoted to strengthen their position in the market.
- Invest for growth – well capitalised businesses may now have significant cash reserves or access to funding at low interest rates, and possible acquisition targets may be more susceptible to a transaction depending on their circumstances. Has there ever been a better opportunity to make a strategic acquisition?
- Get me out of here – after the trials and tribulations of the last 12 months, the appetite of running a business in a post COVID/Brexit era may be somewhat diminished. Added to this, with the widely muted change to Capital Gains Tax (incl. Business Asset Disposal Relief) absent from the March 2020 Budget, there are an increasing number of businesses looking to facilitate an exit whether this is through a MBO or sale to a third party or private equity fund.
Whilst the above are distinct and varied situations, there is one common theme throughout – the need for independent holistic advice to challenge, support and help deliver the desired outcome, whether this has changed fundamentally or not.
What is your opportunity in 2021, and are you prepared to take advantage of it?