Tim Cross, Managing Partner at Langleys Solicitors explores their recent research on the long term effects Covid-19 will have on businesses
The past 12 months were uniquely challenging for almost everyone. The mix of the Coronavirus pandemic, Brexit and a second recession in just over 10 years, has forged a completely new landscape for companies and their leaders to navigate. However, with a lockdown exit plan in place and the start of Spring here, the mood of the region’s businesses is lightening as quick as the evenings.
While business owners and directors admit that the negative effects of Covid will long outlive the end of lockdown restrictions, many are taking a bullish, growth-centric approach to put the events of 2020 behind them.
Our recent research, published in our Back to Business? report, which looked into the future of the region’s companies, shows 71% of businesses expect the hangover of Covid to last at least six months, while 42% expect it to last a year. A quarter of business owners and directors expect it to last at least two years.
However, the key to reducing the impact of Covid is positive planning. Our research also found that many firms in the region already have ideas of how to overcome the effects of the past 12 months. Forty-eight percent of companies are planning to keep the greater shift to online they have adopted over the course of the pandemic, while 30% plan product and service innovation and development, to create additional revenue streams and broaden the scope of their business.
The agility from businesses that was witnessed in immediate response to the pandemic has been fantastic to see, and shows the resilience of business owners and directors. Encouragingly, the data also shows more than two-thirds (68%) of businesses are “generally” or “very” positive about the next 12 months.
Although reporting and headlines about the level of employment can be damning, most companies who altered their business model during lockdown made changes they were planning to make anyway, although in some cases planned changes were made earlier or at a larger scale than anticipated.
While 30% of businesses are planning to restructure, this does not necessarily indicate redundancies, requiring businesses and their employees to reskill and retrain to fulfil the new digital roles that have come about due to accelerated change, and the aforementioned product and service innovations.
Based on the Back to Business? report research, businesses want the Government to make positive change that will allow them to capitalise on opportunities, including improved trading terms – something which we will continue to see negotiated over the coming months. Businesses also want secure funding, and increased provision of Government grants and funding to replace lost investment. The recent Spring Budget will have gone some way to providing businesses with that support.
Yes, there is going to be a hangover, but businesses are willing to tackle this head on. With positive steps and measures to support enterprise, businesses can recover and build back stronger than before. Planning must not be approached with austerity.
Langleys’ specialist Corporate, Commercial Property, Dispute Resolution and Employment law teams are available to advise on any questions business leaders and owners have in relation to new business planning and operations post-lockdown.