It is considered almost universally true that “business hates uncertainty”. A lack of predictability stifles investment, scares off backers and gives business owners sleepless nights – but it also gives oxygen to creativity.
During the worst of this crisis, while established businesses scrambled to minimise disruption, entrepreneurs went looking for opportunity. A new world emerged, and these business owners adapted at lightning speed. They grew their companies even during the darkest days of the crisis, and – as the UK hopefully leaves the pandemic behind, these entrepreneurs and the businesses they built will provide the dynamism needed to help the economy thrive.
Even in December, with the world in turmoil, Investec’s Private Capital team was busy. January has been even more active as businesses seek out growth capital before the end of the financial year.
A dominant theme in the early days of the crisis was de-risking. Companies raised money not necessarily for investment or acquisitions, but to shore up balance sheets and ensure that they were able to trade through a long period of disruption.
The entrepreneurs we work with, on the other hand, were taking the opposite approach. Constraints breed innovation: they saw the opportunity in this changing world, and doubled down. We’ve helped them by lending them money to invest, make strategic acquisitions, buy out competitors and buy out shareholders to give them greater control and freedom.
We also saw new entrepreneurs emerge – a notable trend has been husband and wife teams, each successful in their respective careers, who join forces to launch their own business ventures.
The risks they’ve taken have been rewarded as new opportunities have emerged. The fascinating thing about owner-managed businesses is that they are usually the first to act, quickly seizing new opportunities. For example, a high-flying gym equipment business pivoted its model to online sales, taking advantage of the surge in consumer demand for professional, high-end and personalised gym equipment. They were fast-growing pre-pandemic, but this shift in strategy enabled them to supercharge this growth in a way that will continue to pay off – as well as safeguarding themselves from future restrictions.
Covid-19 has shown that anything is possible. If you’d told me in 2019 that we’d go on to close a multi-million pound international lend without meeting the client face to face, I wouldn’t have believed you. But dealing with clients remotely has became routine.
That’s mirrored what entrepreneurs have been doing: they’ve been expanding internationally, using new tools – and good old fashioned video calls – to scope out markets and make connections.
Naturally, these are the people who can’t wait to travel: meeting clients, investors, hunting for new opportunities is in their DNA.
Staffing and supply chain challenges have certainly caused issues. But the beauty of entrepreneurial, owner-led businesses is that they are creative and act fast. These are job creators – they’re hiring, and if they can’t hire, they retrain and equip people with the skills they need.
Risk-taking, dynamic entrepreneurs have been quietly powering the UK economy throughout the darkest days of this crisis. They will be instrumental in helping it back on its feet.