We asked our entrepreneur clients how they feel about the opportunities and challenges facing fledgling businesses as part of our annual Coutts Entrepreneur Survey. Given the vital role entrepreneurs play in the economy, monitoring their collective sentiment is something we feel very passionately about.
As in 2019, we wanted to understand how they see the world today and what they think the future holds. But of course, this isn’t like last year.
Unbowed by the challenge, alive to the opportunity
Our survey comes in the midst of a uniquely difficult period for modern business, and we wanted to find out how founders are responding to the challenges. By and large, we found them facing the crisis with the resilience and optimism that they’re well known for, even despite the UK suffering the worst fall in GDP during lockdown than other any other developed nation. It’s quite remarkable that not even the largest UK recession on record could knock their resolve.
Coutts Head of Banking and Wealth Management, Greg Kyle-Langley, underscored the challenge and the customary gusto with which entrepreneurs are meeting it.
“We’ve helped over a thousand clients get government assistance to make sure they can keep their staff employed and their businesses running through the toughest part of the crisis. But from talking with them I’ve found that their belief in their ability to make their business ideas work, whatever the environment, has never wavered. As the fog begins to lift, our findings reflect that enduring confidence and enterprise that is the essence of entrepreneurship.”
Hope springs eternal
Despite understandable concerns at a national level around the future of many businesses and their employees, we found a predominantly optimistic outlook among the entrepreneurs we spoke to.
More than half (55%) of respondents felt that the pandemic had either not yet greatly impacted their business (29%), or in fact had presented them with new opportunities for growth (26%). Only one in five (21%) answered that COVID-19 had the potential to significantly impact their business, with a further 24% saying there had been a limited impact.
We already know that entrepreneurs tend to look for openings where others see barriers. The current crisis has therefore provided an opportunity for those who are able to pivot their operations quickly – and have the technology – to demonstrate relevance and offer collaboration in what’s becoming an increasingly digital society.
The impact on customers is the headline worry
Understandably, there were still concerns coming through in the survey responses. The two most prominent issues raised were a decrease in consumer confidence and reduced consumption (22%), and the potential for a global recession (21%). Financial impact comes in as the third biggest concern, at 15%.
These factors are of course closely linked. A global recession will lead to job losses that will hit consumer confidence, and in turn the liquidity and financial viability of many companies. This illustrates the fine, consumer-driven line on which entrepreneur confidence rests.
At the other end of the scale, only 7% identified potential reductions in productivity as a threat. This shows that the widespread transition to remote working hasn’t reduced employees’ ability to work efficiently, as some expected. It’s a positive sign as we move into new government recommendations to work from home.
Another encouraging finding is the low level of concern around access to funding (8%). The investment landscape has remained strong throughout this period, no doubt thanks to the need for new products and services that could help respond to the pandemic – an open source list of European investors collated during lockdown found that 98% were accepting pitches, and a similar number were actively seeking businesses to invest in.
Riding out a short-term decrease in income
Half of the entrepreneurs in our survey said that they expected decreased revenue or profits as a result of COVID-19. Another 16% reported that it was currently difficult to assess.
On the face of it, this seems to contradict the sense of optimism we saw in early questions. Another interpretation is more positive – entrepreneurs are prepared for a short-term financial hit and are maintaining the positive outlook and the resilience to overcome this.
Resilience, courage and creativity at the forefront once again
There is no doubt that entrepreneurs are facing the reality of the moment and are braced for significant impact on their businesses. However, it’s not in the nature of entrepreneurs to stay still while the world around them changes.
The pandemic has accelerated digital transformation by a number of years in industries that had been slow to adopt technology, and so this has been an opportunity for entrepreneurs to demonstrate their creativity and resilience by working with those who have been hit the hardest, to adapt and make the best of a challenging period.
Greg Kyle-Langley highlighted the Coutts mission to provide support and advice to our entrepreneur clients. “Through good times and bad, we’re here to support our entrepreneur clients, and give them the expert guidance they need, to help their businesses, their families and themselves. It’s something we’ve done for hundreds of years and that hasn’t changed despite the shock and interruption of the virus. If anything, it’s strengthened our resolve to be an indispensable partner.
Coutts Entrepreneurs Month
In a sign of our commitment to support the UK’s leading entrepreneurs, we’re hosting our third annual Entrepreneurs Month this October. We kicked off the month with our first event with The Prince’s Trust ‘An Exploration of Female Leadership’, if you missed it you can watch a replay of this event here.
THE 'EXPECT BETTER' PODCAST SERIES
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