By James Thomas, QFP, Commercial Manager d&t
What’s key on everyone’s mind currently, is how businesses will be affected by this unprecedented pandemic short-term. Many businesses are having significant pressures put on their finances, forced to furlough employees and in some instances let them go altogether.
Naturally for businesses, these are the most pressing concerns right now… but that aside, looking long-term there will be lasting effects that the pandemic will have, not only on how we do business but influencing the shape of pop culture, music, fashion and ultimately all of our lives for decades to come.
For the first time in modern history, if not ever, global workforces have been mandated to work from home. In recent years, we have already seen a shift of more businesses choosing to have smaller offices, hot desks and some not having a permanent office space at all. Now that everyone has had a taste of it, employers now know that staff can still be operational and ‘get work done’ remotely, so what does this mean for the shape of businesses in the future?
I would wager that we see a staggering rise in businesses reducing office space and relying more on remote working, potentially only keeping office space for meeting rooms and functions. This will have the effect of significantly reducing costs within the business and allowing more flexible working for employees. The further ramifications that this will cause for office real estate and business parks is tenfold, likely causing them to become graveyards bought up by housing companies.
It will also be telling which businesses manage to weather the storm and which will sadly fall prey to the drop in footfall and restrictions on business. What I’m more interested in though, are the powerhouses that are likely to rise and adapt their systems to allow them to still charge and reach their client bases.
As an accountancy practice, we have already seen some of our clients completely redefine their business model so that they retain their customers; which in some cases will provide a brave new frontier and additional revenue streams once regular trading ensues. We have Martial Artists, Dance Studios, Solicitors, Distribution and indeed our very own accountancy practice still providing the same service as they did pre-Corona, from front living rooms, kitchens, offices and gardens, all streaming directly into clients’ homes!
Much has been said about the digital revolution. My bet is that the biggest business casualty to the Coronavirus will be those that have stood still using antiquated analogue systems that are vastly outdated, that up until now have slipped under the radar.
We also have the ready-made powerhouses that are best placed to profiteer from the severe drop in business elsewhere. As I write this, Amazon has announced it needs to employ an additional 100,000 people to keep up with the unprecedented rise in sales. This time next year, I wouldn’t be surprised to see several announcements that Jeff Bezos is making an acquisition of either competitor or feeder businesses, stemming from the rise in capital reserves this creates.
It’s not just the big players that will be able to capitalise on these events; there are many more SMEs that have seen a spike in sales/services provided. Again, this opens-up the possibilities to huge potential for sideways investment.
There will be life after Corona. For business, the redefined landscape may just be a little more difficult to navigate as firms adopt new ways of working on a permanent basis.