The road to recovery
As part of The Big Conversation: Helping Britain Recover, we’re running a series of virtual events to explore the best road to recovery for regions across the UK.
The first series, which concluded in early October, brought together small and medium-sized businesses in each region to consider the challenges, opportunities and critical areas of support needed.
Here we outline the key findings and highlight some of the event attendee poll results.
Rising to the challenge
It was said in one event that the unique part of the coronavirus crisis is its breadth and scale – being global and affecting all sectors and businesses of all sizes. And unlike the financial services crisis, businesses don’t know when it will end. The full impact is still a long way from being understood, and many businesses are facing difficulties forecasting future demand and necessary resource. The degree of adaptation needed will vary significantly from one company to the next.
Accelerating investment into sustainability, productivity and digitisation have been major trends in the past few months, the latter especially with the increase in home working and investment in new communication technologies.
Collaboration between public, private, education and voluntary sector stakeholders was said to be brilliant during the crisis. Some businesses even decided to contribute to the national effort through making their premises available for the NHS to use or diversifying production to manufacture healthcare items.
in the North West said more local decision making by public bodies would help business recovery the most.
in Wales said the creation of regional growth funds would help business recovery the most.
Innovation and resilience
Poll results show there has been a jump in innovation and resilience since the start of the crisis for nearly all regions, with discussion around how businesses can plan ahead for unexpected events. Resilience planning will likely be far higher on business agendas from now on.
Improving ‘behind the scenes’ systems such as production lines to reflect the new normal has really paid off for many businesses, for example to meet the upsurge in online rather than on-site sales. This is the key to future success – understanding how customers’ behaviour has changed and reshaping operations accordingly.
in the East said they are more resilient than they were six months ago.
in London said they were more innovative than they were six months ago.
Improving efficiency and productivity
Lockdown has been a catalyst for improving efficiency, especially by arming staff with the technology they need to work remotely. Despite good digital infrastructure being important for companies to operate efficiently, improved digital connectivity did not score very highly in the poll results. The majority of regions said the creation of regional growth funds or employee grants would help business recovery the most.
Investing in technologies like automation is one way to improve productivity, but businesses must also invest in intellectual capital – attracting and retaining the best people is a priority. There have been many redundancies, but some remaining employees have been given extra training so they can be more versatile and work across a range of different roles.
in the South East said grants to retain or take on new employees would help business recovery the most.
in the North East said the creation of regional growth funds would help business recovery the most.
Targeting growth opportunities
While in many areas consumer spend has dropped rapidly, there are some areas that have seen growth. Switching focus to online sales has hugely benefitted some businesses, with one company seeing a 575% growth in revenue from online sales during lockdown.
These changing consumer habits means businesses are looking further afield than ever before when it comes to targeting new customers. It’s much easier now for even small businesses to become global if they get shared and talked about on social media. Targeting international growth can allow businesses to de-risk, become more competitive and more profitable.
in Yorkshire and the Humber said tax breaks would help business recovery the most, by far the highest vote.
in the Midlands said grants to retain or take on new employees would help business recovery the most.
Access to finance
It was said that there’s a lack of awareness about all the funding options available to businesses, and a legacy of cautious behaviour since the financial crisis.
Government backed-lending schemes offer very favourable terms, while deferring VAT and income tax payments can support cash flow. To fund growth, firms should look to asset finance and trade finance, as well as private equity investment.
in Scotland said they have more positive cashflow than six months ago.
in the South West said grants to retain or take on new employees would help business recovery the most.