By Thomas Balashev, Founder, Montague Real Estate
Anyone digesting the headlines and latest research over the last few weeks would be forgiven for believing things have never been so bad for small business.
According to a new study from King’s Business School, an estimated six million small businesses are in a ‘financially precarious’ position, while two-thirds of entrepreneurs feel their business might not survive the pressures of Covid-19.
In a separate survey by the Federation of Small Businesses, two-thirds of small British firms said they expect trading to get worse, a situation only exacerbated by the UK’s second national lockdown.
Yet it needn’t be all doom and gloom, dark clouds and thunderous skies. Indeed if history and context has taught us anything, it is that our small businesses tend to find a way to survive and flourish – even in unchartered waters and unprecedented circumstances such as those we face now.
Let us consider that whilst the Covid-19 pandemic has undoubtedly shaken many small businesses’ revenues and belief, we are, by default, a nation of entrepreneurs. Entrepreneurship is in our blood. Our small businesses are the beating heart of our economy. Ambition is part of the national identity.
In the UK, SMEs account for 99.9% of the business population, whilst the latest Global Entrepreneurship Index places the UK as having the fourth healthiest entrepreneurship ecosystem in the world – behind only the US, Switzerland and Canada.
If any nation is equipped to help their scale-ups weather these storms, through a spirit of resilience and the provision of economic support (as we are currently seeing with a range of government SME financial support packages) it is the UK.
We have also seen from previous economic crisis that it is the entrepreneurs, start-ups and scale-ups – and not necessarily the big players – who have the unique ability to not only pull through, but to take hold.
Why? Because whilst the corporate juggernauts may have a staff heavy, debt heavy, real estate heavy bloated structure, it is the small businesses that have the agility and creativity to respond and adapt. Smaller, more nimble businesses can scale back down and reinvent themselves in way that big beasts simply can’t.
Where there is wildfire there is destruction – but the fertilised soil allows new plants to grow, and those ambitious businesses that have fresh ideas can take advantage. We saw this following the 2008 financial crisis, with companies like Pure Gym, Crowdcube, WhatsApp, Uber and Airbnb being born out of the ashes.
We know the world, its industries and the traditional way of doing things has changed – but for those innovators that can pivot and adapt (and at the risk of sounding overly opportunistic at a time when many people unfortunately struggling), opportunities are there to be taken.
As a small business whose work depends on being able to conduct physical viewings, I realised at the start of the pandemic that it was sink or swim; if I didn’t adapt, I was potentially in trouble. So strange as it may sound, I have been able to adapt by undertaking tours of properties virtually.
In July I was able to sell a £5m private island completely virtually, without the new owner having ever set foot on it. If somebody had told me that at the end of last year, I would have laughed at them. But circumstances have forced everyone to realign and adjust, which in turn will provide fresh opportunities for a new generation of entrepreneurial thinkers.
Pivoting and adapting doesn’t just mean the introducing of a new technology, either. For small businesses, it is also about streamlining their people and structure in the face of a changing status quo. In our recruitment and hiring, for example, we’ve specifically looked for new hires that can be dynamic, resourceful and flexible in serving clients in different ways during a difficult period.
Current circumstances aren’t indefinite, and with small businesses being the catalysts of job creation and economic growth in our country, they can look to the future with real confidence and belief. Our nation boasts some of the brightest and most ambitious, disruptive minds in the world; now is the time for them to adapt, step up and seize the opportunity.
