It’s not all about the money
At the time, COVID-19 was called a once in a 100-year event, however two years later we have come out of what for many has been the most stringent restrictions imposed on the public and business at large, as many are still unsure of the foreseeable future.
There are three areas that business owners must be aware of:
A Changing Workforce
The pandemic has changed the workforce forever and business owners are going to have to adapt accordingly and align these with the business’s strategy and purpose.
What is becoming apparent is the workforce desire to have more flexibility and a better work-life balance. Remote work is now commonplace and while this may not be possible in all situations, it has been shown that productivity need not suffer as a result. In fact, the time saved in commuting to the workplace serves a dual purpose in allowing more time for family interaction, while still having the same productive outcomes.
There also is an opportunity and possible need to reskill or retrain the workforce, to accommodate the ever-changing business environment. This will to some extent also alleviate the concern about job security as the drive to automation continues.
Global Supply Chain
The ripple effects of disruptions caused by COVID-19 and more recently the Russian – Ukraine conflict, have been felt throughout global supply chains in both B2C and B2B industries.
To remain relevant and add value, industrial manufacturers and B2B organisations must develop a deep understanding of their customers’ needs and work out how to deliver exceptional experiences to them, without compromising on cost and responsiveness.
As business activity recovers – sometimes at an unpredictable pace – from the current environment, businesses will need to reassess what the upturn means for their revenues and cash flow. Those that are able to plan and manage cash and liquidity positions in a controlled and responsive way, will be better placed to capitalise on opportunities as the recovery strengthens.
For most businesses the fast moving and unexpected impacts of COVID-19, left many unprepared, as well as what impact the pandemic would have on small and medium-sized business valuations. While the future maintainable earnings have always been used as a guide, albeit that it has its limitations, COVID-19 has introduced another dimension.
Business owners need to review financial performance prior, during and now post pandemic and have a realistic view of where the business performance was and the future outlook as a result of the disruptions. For those that are on the market presently, this will be a chance to evaluate if the present asking price is market related and if not to adjust this accordingly. Similarly, those business owners that are intending to go to market, set the asking price at a level commensurate with realistic market expectations.
Article Written by Paul McIlroy – Business Broker at LINK Business Brokers Brisbane