Paul Hake, who is a partner at Albert Goodman, gives his assessment of a recent survey that his firm sent out to over 12,000 businesses. The aim of the survey was to find out the challenges facing those running family firms.
The pandemic has affected some sectors more than others and therefore drawing general conclusions is difficult. My experience is that businesses in some sectors such as retail – that we would have expected to be hit hard – especially those that own their premises or were able to do a sensible deal with their landlord, have often done better as a result of opening at certain key times. The rates holiday was most welcome and the government needs to press on with its review of the rating system if it wants the high street to survive and thrive.
I was a little surprised that only 50% thought that this has been their most difficult period of trading. It begs the question what was most difficult for the other 50%? This could be industry specific or perhaps there are established businesses that have lived through past recessions.
Responses to the survey may well have been different had it not been for the unprecedented level of government support. Just over half felt it has been good enough, 21% did not with the balance undecided. No schemes could have saved every business and I have no doubt that in general the support did what it was intended.
The question now is how do we pay for it? The Chancellor, Rishi Sunak was right not to do too much in his March budget as we need to see how the economy recovers first. The proposed increase in corporation tax to 25% was disappointing and the relatively low level at which the higher rate starts. This will affect many family companies and I would like to see the lower threshold increased significantly.
52% reported that Brexit doesn’t play less part in their thinking. Without the pandemic, Brexit would undoubtedly have attracted much more media coverage and to the general public a lot of the issues affecting businesses may have gone unnoticed.
My experience is that the practicalities of doing business with Europe and Northern Ireland have hit many family businesses hard to the extent that they are questioning whether it is worth it. We need this trade for our economy to grow and as attention shifts away from the pandemic the government needs to listen to these businesses and simplify the processes.
Overall, I took a message of optimism from the survey. In particular:
- 69% plan to recruit new talent in the next 12 months
- 73% are confident about the next 12 months
As we emerge from lockdown this ties in with the forecasts that our economy will recover quickly and there will undoubtedly be opportunities for forward thinking businesses to take advantage of the new normal – whatever that may be.