Business Leader Magazine: Special Edition by Business Leader magazine

9 1 -1 e 2 ID g V pa O n 'C o r t' ou en e m Se ple p Su

May - June 2020

SPECIAL EDITION

A BRAVE

NEW WORLD

Business has changed forever. But what does it mean for your future?

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IN THIS ISSUE

24 16

Contents IN THIS EDITION 5

Business Leader ‘Insight’ Official launch of our webinar series with leading business figures

10 Feature Interview: Valerie Moran Business Leader sat down with Valerie to talk about the sale of fintech giant Prepaid Financial Services (PFS) and her ambitions moving forward 16 Fast-Track: The Alchemist We investigate the rise of The Alchemist – a chain of creative cocktail bars and restaurants

BUSINESS LEADER VISION: INSPIRE

INFORM

CONNECT

30 Sector Report: Private equity BLM reports on how private equity is being influenced and what investors should be aware of

54 Review: Created in a crisis Business Leader Magazine reviews five businesses that were created during recessions

34 Sector Report: Recruitment BLM spoke to some of the country’s leading businesses within the recruitment space

LEADERSHIP

39 Feature: US economy What is next for the US economy after the coronavirus crisis

COVID-19 GUIDE

44 Sector Report: M&A We look at how mergers and acquisitions (M&A) activity is currently being affected

24 Debate: Future of work How are different sectors reacting and what do leaders think the future will look like?

47 Comment: Mental health How can business leaders protect their own wellbeing during crises?

28 Survey: Impact of COVID-19 BLM surveys its readership on the impact the pandemic is having on businesses and employees

50 Interview: Lord Mark Price Lord Price also talks about his career in the John Lewis Partnership and the keys to remote working

Business Leader - Inspire • Inform • Connect

56 Top 32 Female Leaders Business Leader has brought together a list of 32 female entrepreneurs to look out for 62 Interview: CEO in Focus Ian Smith is the CEO of 1pm plc, an independent provider of finance facilities for SME companies

TECHNOLOGY 64 Feature: Future of 5G in the UK How it can be transformational and why the UK is so far behind the rest of the world 68 Debate: Technology How is technology impacting the world of transactions and payments?

LATEST NEWS

Inspire • Inform • Connect EDITORIAL Oli Ballard - Editor E: oli.ballard@businessleader.co.uk Barney Cotton - Digital Editor E: barney.cotton@businessleader.co.uk DESIGN/PRODUCTION Adam Whittaker - Senior Designer E: adam.whittaker@businessleader.co.uk Melissa Larkin - Website Development E: melissa.larkin@businessleader.co.uk Ben Matthews - Digital Communications E: ben.matthews@businessleader.co.uk SALES Sam Clark - Business Development Manager E: sam.clark@businessleader.co.uk Emma Filby - Business Development Manager E: emma.filby@businessleader.co.uk CIRCULATION Adrian Warburton - Circulation Manager E: adrian.warburton@businessleader.co.uk ACCOUNTS Jo Meredith - Finance Manager E: joanne.meredith@businessleader.co.uk MANAGING DIRECTORS Andrew Scott - Managing Director E: andrew@businessleader.co.uk

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British start-ups attract more than £600m in investment since lockdown British start-ups raised £663m in investment in the first month after the country went into lockdown, driven by high levels of activity in the tech sector, according to new research released by Plexal and Beauhurst. Plexal, the innovation centre and workspace owned by clients of Delancey, and Beauhurst, the UK’s leading database for fast-growth companies, has analysed UK investment activity from Monday 23 March 2020 until Monday 27 April, to provide an accessible, factually-driven window into the state of the UK’s startup community and tech sector. They found that the total value of investments has increased by 34% compared to the same period in 2019, as a result of investors

providing additional capital to ensure the survival of companies during the economic disruption. However, deal numbers were down by 39%. Of the £663m raised, £50.2m went to start-ups that had never raised funds before the lockdown. Henry Whorwood, Head of Research and Consultancy at Beauhurst, comments: “While the data shows an immediate downturn following lockdown, our hope is that the startup and technology sectors will remain resilient during this economic disruption. The concern is that a reduction in the number of deals reflects a fall in investor confidence that could cripple the growth of the country’s most successful start-ups and fast-growth businesses.”

British Airways to cut up to 12,000 jobs British Airways (BA) is set to cut up to 12,000 jobs from its 42,000-strong workforce due to the collapse of the leisure industry during the coronavirus pandemic. IAG - BA's parent company - revealed that the first three months of 2020 revenues fell 13% to £4bn, due to the impact of the COVID-19 lockdown. IAG also owns Spanish 2

airline Iberia and Ireland's Aer Lingus. In a letter to colleagues from Alex Cruz, Chairman and CEO at British Airways, he said: "Our very limited flying schedule means that revenues are not coming into our business. We are taking every possible action to conserve cash, which will help us to weather the storm in the short-term." May - June 2020

It’s taken 150 years to build up our business, and it hasn’t always been easy.

We are here to support you in uncertain times. Albert Goodman, business support you can count on. 0330 333 5039 www.albertgoodman.co.uk TAUNTON

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LATEST NEWS

HSBC pauses plan to cut 35,000 jobs across the world Knightstone still investing and acquiring SMEs and corporate carve-outs Knighstone Capital, which acquires or invests in companies with turnovers up to £20m, has confirmed it is still supporting UK companies. Nichola Ryan, Investment Executive, commented: “We are in talks with several insolvency firms and private equity companies who are seeking a new owner for a business, but equally we are talking to business owners who wish to exit for a multitude of reasons – simply the right time, retirement, cash-flow problems or to pursue other interests. “Not all business owners want to sell, some are seeking an equity partner who can add some real value such as strategic advice or faster access to customers, particularly during these uncertain times when a ‘safe pair of hands’ is extremely valuable." The firm typically focuses on companies between £500,000 and £20m annual revenue, although it will consider larger ventures. Established businesses with a strong brand are preferred and the firm has the team and resources to move quickly. It recently completed on the acquisition of a publishing business during lockdown, with the entire transaction taking three weeks using Zoom video conferencing and scanned documents. Knightstone Capital is sector agnostic but has specific expertise in digital and technology companies, media and publishing, marketing and B2B business services. It also has an interest in manufacturing, the low-carbon economy and home improvements. The firm is based in Hatten Garden, London, but operates across the UK. www.knightstonecapital.co.uk 4

HSBC has paused plans to cut 35,000 jobs across the world, as the banking giant revealed that it does not want to leave staff unable to find work elsewhere during the coronavirus crisis. The news follows the announcement of the severe impact the COVID-19 pandemic is set to have on the business. HSBC CEO Noel Quinn said: "The economic impact of the COVID-19 pandemic on our customers has been the main driver of the change in our financial performance since the turn of the year. The resultant increase in expected credit losses in the first quarter contributed to

a material fall in reported profit before tax, compared with the same period last year. "HSBC has always been there for our customers in times of crisis, and we are working hard to support them during this unprecedented period of disruption. We do so from a position of strength, with robust levels of capital, funding and liquidity. "I take the well-being of our people extremely seriously. We have therefore paused the vast majority of redundancies related to the transformation we announced in February to reduce the uncertainty they are facing at this difficult time."

Chinese firms looking to acquire or invest in distressed foreign assets during COVID-19 Even as the COVID-19 pandemic continues to affect the global economies and businesses, Chinese companies have upped the ante to acquire or invest in distressed foreign assets in strategic locations. According to GlobalData, during January to April 2020, 57 Chinese outbound M&A deals worth £8bn and 145 Chinese outbound investments worth £3.6bn were announced. The key M&A target destinations for Chinese firms included the UK, Hong Kong, USA, Germany, France, Canada and India. The key investment destinations during the period also included Japan, Germany, South Korea and Australia. May - June 2020

LATEST NEWS

Business Leader launches ‘Insight’ live interview series Ever since the government-imposed lockdown due to the coronavirus pandemic, businesses across the country have had to adapt – and Business Leader is no different. In April, Business Leader officially launched the ‘Insight’ webinar series, a set of live interviews with some of the UK’s leading business figures. So far, there have been three exclusives, with many more on the horizon. The first was with Lord Mark Price, the former MD of Waitrose and founder of Engaging Works. For his webinar he talked about the future of work and what impact the COVID-19 crisis has had on businesses.

(Right) Joel Blake OBE

Jackie Fast’s webinar dove into how she went from being a broke backpacker and pulling pints in Tooting Broadway to creating a multimillion pound business in less than six years. The most recent webinar was with Joel Blake OBE – who is one of the preeminent names in the UK fintech industry who specialises in business support and enterprise development. With more ‘Insight’ webinars soon to be announced, make sure you check www.businessleader.co.uk/events for the latest information.

Lord Mark Price

Jackie Fast

GET A COPY BUSINESS LEADER MAGAZINE SENT TO YOUR HOME With many people now working from home, our circulation team is working hard to make sure that our readers don’t miss out on receiving their copies of business leader magazine.

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LATEST NEWS

Cazoo raises £100m despite coronavirus crisis

SoftBank announce £13.3bn loss on tech firms it has invested in SoftBank has announced that it expects to lose up to £13.3bn on the tech firms it has invested in through its international start-up fund. The Japanese conglomerate is the world’s biggest technology investor firm and has been funding firms over the last decade through an £88bn ($100bn) 'Vision Fund'. Softbank has blamed the losses on the ongoing coronavirus outbreak which has caused markets across the world to deteriorate. The company has stakes in some high-profile tech firms including WeWork, OneWeb, Sprint, Uber, Nvidia and Slack.

Cazoo, the online car marketplace, has announced that it has raised £100m funding to grow the business, despite the ongoing coronavirus crisis. The firm is the latest venture from Alex Chesterman, who previously founded LoveFilm and Zoopla. Cazoo has raised a total of over £180m since being founded less than 18 months ago, and this latest funding round was led by DMG Ventures alongside other investors including General Catalyst, CNP (Groupe Frère), Mubadala Capital,

Octopus Ventures, Eight Roads Ventures and Stride.VC. Alex Chesterman, founder and CEO of Cazoo said: “It’s clear that UK consumers are ready to buy cars online in a convenient, hassle-free way. Cars are an important form of transport for many in our society, whether conducting deliveries or getting to essential jobs and we want to ensure that those who need one can continue to get one. This new round of funding is a strong signal from investors of the scale of the opportunity.”

ContentCal raises £2.5m from Fuel Ventures Marketing technology company ContentCal has secured a £2.5m investment from early and growth-stage investor Fuel Ventures, with participation from existing shareholders. The new funding will be focussed on driving customer growth, product innovation and doubling the size of the team. With the new investment, ContentCal’s mission is to continue to build and scale its content marketing and collaboration platform. The software is designed to make it easy for companies to distribute better marketing content at scale and own their growth through content marketing. In the last 12 months, ContentCal has grown over 200% year-on-year. It has more than 1,500 paying customers and 35,000 users across more than 100 countries. Alex Packham, founder and CEO of ContentCal, added: “I’m delighted to have secured funding from Fuel Ventures and be working with them on the next phase of our journey. After meeting a number of investors, Fuel fully understood the business after the first meeting, moved incredibly quickly and have already added value in the short time we've been working with them.” 6

Mark Pearson - Founder of Fuel Ventures

May - June 2020

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LATEST NEWS

Six-figure funding injection for Nottinghamshire engineering consultancy

New measures to protect UK high street from aggressive rent collection Dr Dave Gent speaking at The Bridge conference

Engineering Consultancy Services Limited has received a six-figure sum investment from Enterprise Loans East Midlands through the Midlands Engine Investment Fund. The firm provides a range of engineering solutions, including civil and structural design, as well as condition repair work. The funding will allow the business to scale-up and enable staff to gain further training and accreditations. Founder, Dr David Gent, comments: “I set up my own business to not only challenge the way things are done in terms of innovation and efficiency but to also leave a legacy. Enterprise Loans has been fantastic at supporting this aim.”

High street shops and other companies under strain will be protected from aggressive rent collection and asked to pay what they can during the coronavirus pandemic. To stop these unfair practices, the government will temporarily ban the use of statutory demands (made between March 1 2020 and June 30 2020) and winding up petitions presented from April 27 2020, through to June 30 2020, where a company cannot pay its bills due to theoutbreak of coronavirus. This will help ensure these companies do not fall into deeper financial strain.

The measures will be included in the Corporate Insolvency and Governance Bill, which the Business Secretary set out in April. Business Secretary, Alok Sharma, said: "In this exceptional time for the UK, it is vital that we ensure businesses are kept afloat so that they can continue to provide the jobs our economy needs beyond the coronavirus pandemic. Our unprecedented package of support can help commercial landlords, including through the recent expansion of the Coronavirus Business Interruption Loans Scheme (CBILS).”

Who have been the ‘visitor’ winners and losers in the online retail sector? Data gathered by Learnbonds indicates that online retail giant Amazon had 4.06 billion unique visitors in March. According to the data, this figure was more compared to combined visitors for the other five leading online stores. eBay, Apple, Walmart, Rakuten, Samsung.com, and Apple.com had cumulative visitors of 3.85 billion. eBay registered 1.2 billion unique visitors, followed by Rakuten at 0.8 billion, while Samsung.com had 0.6 billion. Walmart came fifth with 0.61 billion visitors. Other platforms with high visitors include Apple.com (0.56 billion), Aliexpress (0.53 billion), Etsy (0.4 billion), Homedepot (0.29 billion), and Allegro.pl (0.27 billion). The high traffic received by online stores in March can be attributed to the coronavirus pandemic. According to the report: “March marked a period when most people began staying at home as a precautionary measure to curb the spread of the coronavirus. As a result, many turned to online stores for shopping." 8

May - June 2020

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FEATURE INTERVIEW

‘ALWAYS CHASING

THE NEXT BIG IDEA’

TECHNOLOGY IS VERY FAST-PACED. TODAY'S HOTTEST TREND IS YESTERDAY'S NEWS. IT IS AN EVOLVING SECTOR WHERE YOU NEED TO CONSTANTLY LOOK AT KEEPING AHEAD OF YOUR COMPETITORS. BASICALLY, NEVER RESTING ON YOUR LAURELS AND MOVING ON TO THE NEXT BEST IDEA.

May - June 2020

VALERIE MORAN

“What I do today is not just a job. It is my passion, my dream and it is personal,” says Valerie Moran, the first black female to make the Sunday Times Rich List. Business Leader spoke to Moran at the beginning of April, the day after the sale of fintech giant Prepaid Financial Services (PFS) – a firm she worked to create alongside husband Noel. She talked to BLM about her career, her successes, and the ambitions she has left to fulfil. CAN YOU GIVE US A BRIEF OVERVIEW OF YOUR LIFE AND CAREER TO DATE? My career did not start off in fintech or reflect what I do today. I am a qualified systems analyst by profession. I worked in several other industries over the years that gave me great experience and discipline in many other areas of my career. I began working in fintech in 2007. PFS started with Noel and I working from the kitchen table. I have a very busy lifestyle as my day starts at 8.30am and continues until around midnight. I manage several other businesses outside PFS on a day-to-day basis. YOUR FATHER HAS BEEN DESCRIBED AS A ‘SERIAL ENTREPRENEUR’ – TO WHAT EXTENT DID HIS ACHIEVEMENTS SHAPE YOUR OWN BUSINESS MINDSET AND AMBITIONS? My father was orphaned as a young child and as a young man he was determined to work hard and to be successful – that was his ambition. Because of his upbringing, he never took anything for granted and nothing was a given for him. His mindset was always focused on educating us in several disciplines. One of them was that you need to be self-reliant and independent. From a very young age, he always advised us to work hard and make a success of ourselves. He definitely lived by this, as he worked tirelessly to run his several businesses. His ambition allowed me to appreciate his success, self-belief and perseverance. YOU LAUNCHED PREPAID FINANCIAL SERVICES WITH YOUR HUSBAND DURING A GLOBAL FINANCIAL CRISIS – WHAT MADE YOU SO CONFIDENT YOU COULD SUCCEED AT SUCH A DIFFICULT TIME? When PFS was founded it was during the recession. At that time, my husband had resigned from a company that had just gone into administration. He had been working on the idea of building PFS as a new business venture. The idea to set up PFS only took off when I joined him. It was taking a chance on an idea we both believed in and we could see the potential in. However, potential did not mean success – it meant ‘hope’ for us. We decided that we would pursue the idea and work hard on growing the business and giving it our best shot. We basically asked ourselves, ‘what could be the worst thing that could happen?' – as an entrepreneur, you cannot start thinking on a negative leg as that just hinders your potential. If you cannot believe in yourself and your own product, then how can you expect to sell or make the next person believe in you? This is where self-belief was very important. Cont. 

Business Leader - Inspire • Inform • Connect

FEATURE INTERVIEW

Moran with members of the PFS team

Moran speaking with Ian King on Sky News

EVERY SUCCESS STORY INCLUDES MISTAKES AND SETBACKS ALONG THE WAY. WHAT WOULD YOU CONSIDER YOUR BIGGEST MISTAKE, AND WHAT DID YOU LEARN FROM IT? In the early days of the business, one of the mistakes was trying to do 20 jobs as one person. This was a stretch and I lost my focus in some areas of the business and missed opportunities. As the pressure of trying to keep everything afloat catches up with you, it is very important as an entrepreneur to focus on your strengths. WHAT WAS THE BIGGEST CHALLENGE YOU FACED AND OVERCAME TO ESTABLISH AND GROW THE COMPANY? We started our business during the recession with no capital injection. We scraped through to build the business in the recession in the early days. We sought investment at the time and no-one was willing to invest in the business as we were too small. That meant every penny counted and had to be used very wisely. 12

HOW WOULD YOU SUMMARISE PFS TODAY? PFS has become the definition of a modern, innovative fintech. Its portfolio of dynamic payment technology solutions encapsulates the best that electronic money can offer. With our cutting-edge technology and agile approach, PFS is capable of delivering bespoke solutions that suit and meet our client needs and requirements. We provide payment solutions to clients across 24 different European countries. Today, we work with NGOs, MNOs, challengers, local authorities and a comprehensive list of corporates. WAS IT A DIFFICULT DECISION TO SELL WHEN THE OFFER CAME ALONG? When we started off the business, we always knew at some point we were going to sell the business. However, it was not about just selling the business to anyone, it was about finding the right partner. Our partnership with EML is one that has many synergies on both sides and one that brings greater value to us both.

YOU ARE FINANCIALLY SET FOR LIFE – WHAT CONTINUES TO DRIVE AND MOTIVATE YOU IN BUSINESS? What I do today is not just a job. It is my passion, my dream and it is personal. My inspiration comes from seeing the expansion of the business year-on-year and how we continue to surpass our targets. Providing a learning curve for our staff is gratifying. YOU MADE HEADLINES LAST YEAR FOR BEING THE FIRST BLACK WOMAN TO MAKE THE SUNDAY TIMES RICH LIST. ARE YOU PROUD TO CLAIM THIS DISTINCTION, OR DISAPPOINTED IT’S TAKEN UNTIL 2019 FOR A BLACK FEMALE TO MAKE THE LIST? My first feelings about the article I would describe as bittersweet. I was delighted with the news and it was a huge recognition of my success. It was a historic moment in my life as I was the first black woman to make the list. However, the bittersweetness was the sad realisation of the absence of black women May - June 2020

VALERIE MORAN on the list. It immediately brought questions to my mind about why and how. It has made me look at investment opportunities with ethnic female entrepreneurs and assisting where possible. YOU HAVE SPOKEN PREVIOUSLY ABOUT BEING BOTH ‘THE ONLY WOMAN IN THE ROOM’ AT TIMES IN YOUR PROFESSIONAL CAREER, AS WELL AS BEING ‘THE ONLY BLACK PERSON IN THE ROOM’ AT OTHERS. WHAT CHALLENGES HAS THIS PRESENTED FOR YOU? 13 years ago, when I started, there were very few women in technology. Hence, most of the conventions or meetings I would have attended, I was the only woman at the time. There were so few women in the room of any race. There were occasions when getting my voice heard was a challenge and that was frustrating at times. The lack of women of colour when I started, to share ideas, network with and also learn from, was another challenge.

YOU HAVE BEEN ACTIVELY TRYING TO INSPIRE OTHER PEOPLE FROM MINORITY BACKGROUNDS INTO THE TECH SECTOR. CAN YOU TELL US MORE ABOUT THAT? When I started the business, the focus in our recruitment policy at PFS was to create unbiased policies without prejudice. For me, it was being able to work with anyone from all walks of life. Recruiting staff that had the right skillset and based on merit. That meant appreciating individuals for their capabilities and not where they are from. Today, we are proud to have a large workforce of nearly 45% ethnic minorities across all our offices in the UK, Ireland and Malta. We have successfully built a diverse culture in our business.

EMPLOYERS SHOULD VALUE THE DIFFERENCES AMONGST THEIR EMPLOYEES. SHARED IDEAS FROM DIVERSE TEAMS LEADS TO GREATER INNOVATION.

WHAT ADVICE WOULD YOU OFFER TO SOMEONE ELSE LOOKING TO LAUNCH A BUSINESS IN THE TECHNOLOGY SECTOR? Technology is very fast-paced. Today's hottest trend is yesterday's news. It is an evolving sector where you need to constantly look at keeping ahead of your competitors. Basically, never resting on your laurels and moving on to the next best idea. WHAT AMBITIONS DO YOU HAVE LEFT TO ACHIEVE? WHAT DOES THE FUTURE HOLD FOR YOU? I currently have an acquiring business that employs 60 staff members. I will continue to expand the growth of my other business with the same passion. I recently restored the stables and grounds of our stud farm and I am trying to get planning permission to restore the listed building on the farm. The dream is to turn the listed building into a hotel. Finally, I am also trying to get planning permission to build a six-storey building for a fintech centre. My outlook is very busy. If I can get to achieve all of the above I will retire. 

13 years on, women from all different races and backgrounds are taking on careers in technology. Whilst the numbers do not compare to our male counterparts, women are taking on careers in technology and today there are many other women to learn from and be inspired by. WHY IS THERE STILL SUCH A DIVERSITY GAP IN CERTAIN BRITISH BUSINESS INDUSTRIES? AND, WHAT CAN BE DONE TO CLOSE THAT GAP? There have been many factors that have led to the diversity gap. Change of mindset from management has not yet moved on in some companies. If companies could embrace an open mind with their recruitment policies and hire on merit and practice equal opportunities, that would be a start. Creating and encouraging training programmes to mentor those who may not have the right qualifications but have other valuable skillsets and identify potential within the business. Embracing employee engagement programmes that directly address the inequalities within each business. Employers should value the differences amongst their employees. Shared ideas from diverse teams leads to greater innovation. Business Leader - Inspire • Inform • Connect

ADVERTORIAL

Entering Japan the ‘Kookai’ way L ittlePod now has a mask of the ancient Japanese priest Kookai hanging on its office wall: he is often depicted holding a fan which sweeps away misfortune and brings, in its place, good fortune.

LittlePod is a UK-based natural ingredients company, with a passion for real vanilla. Founded in 2010 and recent winner of the Queen’s Award for Enterprise in Sustainable Development the company now exports widely. It was a leap of faith which took Janet Sawyer BEM (pictured), founder of the LittlePod natural ingredients company, to Japan in early March this year, as the company celebrated its 10th anniversary. LittlePod had planned to go the conventional route via Foodex, an international trade show. However it was cancelled due to the early signs of COVID-19. So the LittlePod team decided to take a road less travelled: avoiding the lengthy processes associated with penetrating complex buying chains or another expensive option, offered to the company, via an online sales platform with an exciting but, what would be for Japan, relatively unknown product. The first call to the British Embassy to meet with Kai San, Senior Trade Advisor, confirmed and reinforced this message. LittlePod had recruited an intern from Italy, Andrea Speciale (pictured), who had graduated with a Masters in Japanese culture and language, to act as intermediary and interpreter. It was important, of course, to communicate to him the particular values and goals of the company. He said: "When Janet explained everything to me about the company and her campaign to convert people to real vanilla I could see the fire in her eyes and immediately felt both involved and committed to the task." 14

The team were very eager to show their brand and products to Japanese chefs, cooks and bakers to seek their opinion. Therefore, as a first step, a visit to a Japanese cookery school to appreciate the fundamentals of Japanese cuisine was essential. So to the Kookai Cooking Studio and its proprietor Yumi. A mutual love of baking, quality ingredients, the future of the planet and a shared passion for Japanese Noh theatre won the day and an enduring friendship. Yumi, with her strong background in marketing as well as cookery, is now preparing to present the LittlePod products widely across Japan. They found an importer and made several visits to see buyers at key department stores and other outlets. As Andrea said: ‘even if she knew it would be difficult Janet did not give up. And I believed we would

manage to find business thanks to her ‘Janet-ism’…she wasn’t afraid to talk to anyone [it was also hard for me to keep up with her], she was so proactive and full of ideas.’ From small acorns large oaks grow and LittlePod has established firm beginnings in a hard-to-enter market. The LittlePod products are currently being very wellreceived: for their quality and branding. The Japanese were really impressed with their Queen's Award and also the LittlePod philosophy which aligns with the Japanese ‘Mottainai’ or ‘sustainability without waste’.

Please do visit our website for further information: www.littlepod.co.uk

May - June 2020

SELL ING BUS Y INES OUR S? O

R SE EQU EKING ITY AN EW PAR TNE R?

Knightstone Capital is investing in or acquiring small and medium companies (£500k to £20m) with strong brands and reputation. companies, corporate carve-outs to retirement sales. We will consider most sectors/markets but have particular interest in the following: • Digital/Technology • B2B Services • Business Events • Marketing • E-commerce • Media/Publishing

• Home Improvements • Manufacturing • Low/Zero Carbon

KNIGHTSTONE CAPITAL

www.knightstonecapital.co.uk

T: 0203 146 1323

ESS LEA IN

R DE

BU S

FAST-TRACK

FAST TRACK

THE BUSINESS OF MIXOLOGY

n each edition of Business Leader Magazine, we profile a UK business experiencing exponential growth in a feature called BLM Fast-Track. This time, we investigated The Alchemist – a chain of creative cocktail bars and restaurants. Over the last decade, there has been an increased focus by food & drink, leisure, and retail brands to branch out of their current formats and become more ‘experiential'.

ou nd er

Offering a unique experience is exactly what The Alchemist does for its customers. This distinctive chain has built a reputation for its theatrical service and award-winning food and cocktails.

rts be Ro y m Jere

-F

Founded in the Greater Manchester region in 2009 by Jeremy Roberts, the firm now operates 20 properties in 12 major cities in the UK and has almost 1,000 staff members. Playing on the traditional definition of alchemy – the chain utilises a science theme, delivered with theatrical performances by its staff – creating a unique experience. But what have been the keys to their success? What separates them from the competition? And what challenges have they faced? BLM investigates. Secrets to success Over the last three years, the company has experienced year-on-year growth of 45%, and last year reported a turnover of £41m.

AT THE TIME OF THE INVESTMENT, WE HAD FOUR VENUES. TODAY WE OPERATE 20 SITES, WITH A STRONG PIPELINE IN THE UK AND PLANS TO TAKE THE BRAND OVERSEAS. Simon Potts – Managing Director, The Alchemist

May - June 2020

THE ALCHEMIST

However, the company’s growth was kickstarted in March 2015, when Palatine – a Manchester-based private equity group – took a majority stake in The Alchemist. Simon Potts, Managing Director at The Alchemist comments: “Palatine backed our ambitious management team to develop the concept of bringing unique cocktails mixed with theatre into a national brand. “At the time of the investment, we had four venues. Today we operate 20 sites, with a strong pipeline in the UK and plans to take the brand overseas. Since Palatine’s involvement with the company, sales have climbed from £11m to £50m.” But, how did they achieve this success? Especially considering the current plight of the bar and restaurant industry. Potts continued: “The growth has been measured and managed. We operate in a very fickle consumer-facing sector that is littered with ailing brands who have grown too fast and too far. We’ve had the benefit of seeing other operators’ mistakes, so have

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tried to smooth the way where we can. “From day one of the investment, we have been sure to map the estate growth to operational capacity and solid central infrastructure. We’ve built award-winning finance, marketing and HR teams – all high functioning in the support or amplification of our ‘main thing’; the venues.” That focus on not just having staff numbers, but creating leaders and innovators within the industry, has shown that with the right mix of quality, experience and staff, it is possible to rise above the challenges facing the sector and establish a successful brand. Potts explains: “We have an energetic and engaging senior team who have become well regarded in the wider sector, regularly contributing thought leadership, delivering presentations and taking part in panel discussions in a broad, multifaceted industry.” Augmenting the industry Creating something unique is often a pathway to creating a successful brand,

often including the introduction of technology in an interesting and original way – which is exactly what The Alchemist sought to achieve. Once again playing on the alchemy and science theme, customers can use augmented reality to interact with their cocktails. For example, they also offer molecular mixology classes to those who wish to create their own drink. These have been the keys to success, as Potts explains: “We work with huge amounts of data and have become quite skilled at deploying it to drive success. "This approach works right the way across all disciplines in the business; informing site acquisition, ensuring a high degree of customer feedback, creating strong engagement across all social channels and developing a clear platform for employee attraction, onboarding and retention.

Cont. 

FAST-TRACK

“We believe we have a fairly unique operating style. The design heavy proposition makes us attractive to landlords and customers alike, and our connected, collaborative approach to the community around us at each site ensures we aren’t perceived as just another high street restaurant.” However, the customers’ expectation, as a result of the company’s success, has led to further challenges. Potts comments: “Our biggest barrier to entry is the quality and knowledge of our front-line teams, the bartenders, servers and chefs who are delivering theatre, served every service, every day, every week. In a well-publicised challenging sector to recruit and retain staff, our turnover figures are almost half the industry average.

“Quite apart from the cost saving, the positive upside of this is the quality of experience for the final user. We train relentlessly to deliver on those metrics, the perpetual development of our people sits at the very core of our business – and growing at the rate we are means that we can meet the demand for internal career progression and pathways.” What are the current and future trends in the industry? The wider food and drink sector is experiencing extreme disruption, with new age trends and a wider range of choice available more than ever before in human history.

ultimate FMCG industry. From veganism, to ‘low and no’ – you have to be hyper aware of the market and its needs and wants. “For us, the trick is to fold these trends into your main product – you can’t shift your whole offer to suit a fleeting moment in time. That said, you have to be clear about how you reflect those options. "The vegan in the group of eight is always going to be the loudest voice in a group deciding where to eat.

So, how do companies within this sector look to adapt to these changes?

“Looking ahead, we are excited about the idea of continuing to grow. We have chartered a course that will see us add another four to five locations annually, in fast-developing metropolitan cities around the country and London.

Potts explains: “The food and drink sector is awash with trends, it’s the

“We have been running a deep-lying project to take the brand overseas and look forward to the evolution for that plan over the next 12 months. We are targeting our first international venue in late 2021.”  May - June 2020

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ADVERTORIAL

HOW HAS WESTON COLLEGE REACTED TO THE COVID-19 CRISIS?

usiness Leader recently spoke to Dr Paul Phillips CBE, the Principal and Chief Executive of the Weston College Group, to discuss how the institution has adapted since the coronavirus outbreak. WHEN DID YOU FIRST HEAR ABOUT THE VIRUS AND WHEN DID YOU THINK IT WOULD START HAVING AN IMPACT ON UK BUSINESS? We first heard about the coronavirus in late January, as at the time we were in major negotiations to deliver training in China. It became very apparent when speaking to our colleagues in the country, that the situation was getting serious. A few weeks later, we got the update from the government on the situation evolving in this country – although we were not getting any clear guidance for businesses or how we could operate the college, so we moved the business to a more virtual operation. We completed this a few days before the shutdown, so we were prepared. WHAT ACTIONS DID YOU TAKE ONCE YOU HEARD WHAT WAS GOING ON IN CHINA? Once we knew fully what was happening in China, and it was common knowledge across the UK, I spoke to our governing body and our board. We first decided not to send any of our staff over there. Then, in the absence of clear guidance, we took the view that we should close the college as soon as we could. HOW HAS THE LOCKDOWN AFFECTED THE COLLEGE? Prior to the lockdown, we had to ensure that all our lessons could run on a digital basis, and we had to replicate all our services for our core learners, staff and employers online. We have over 1,000 employers who work with apprentices, so that was a massive undertaking. We faced several problems, as some employers were laying apprentices off, while others were considering furloughing them.

So, we had a lot of learners that were facing a forced break from an employer. As a college we had to negotiate with that employer, so that we could take that learner back to the college to learn digitally. This has meant, in some cases, we are offering more training that we would have previously. This proved highly successful. The college also received applications for extra training from the NHS – so we have opened part of the college to deliver specific training needs to help with the current crisis. We have also provided training videos for the manufacturing of PPE.

Dr Paul Phillips CBE

HAS THE SITUATION NOW SWITCHED FROM DEALING WITH THE CRISIS, TO LOOKING AT HOW WE CAN GET BACK TO NORMAL? We’ve prepared for this by ramping up communication across the business, and at the end of each week I publish a full, online update for everyone from the college, our governing bodies, and local government. Now, we are starting to look at what the future of the college will look like. We will be opening in September, but with the nature of the current pandemic, there will still be restrictions in place that we must be aware of. Staff and students with underlying health conditions will need help and guidance – and we will see some form of social distancing still in operation. There is also a greater need for PPE than ever before – although we have yet to receive any official guidance on this. WHAT CHANGES HAVE THE COLLEGE MADE THAT YOU SEE WILL STAY POSTLOCKDOWN? I think that COVID-19 has been the catalyst for full digital learning. As a result, we will be moving into a new model of direct delivery

and online, digital support. The changes will be dramatic and some of the digital offerings are probably better for our learners. New technologies and business strategies have been introduced to everyday life, and I believe these are major steps forward. HAVE YOU EVER FACED A BIGGER CHALLENGE THAN THIS IN YOUR CAREER? Over my career, I have worked for the NHS, computer-aided command systems, a string of hotels – but all of those were focused on cashflow and delivering a high level of service. This time it is a lot trickier, as nobody knows the total implication of the impact of coronavirus. We could face further lockdowns and restrictions – as well as further peaks in infections. However, we have been ahead of the game so far, but some decisions from the government and leading bodies have been in hope rather than expectation – making calculated risks. However, as we move into this next phase, our 30,000 students and 1,500 staff need to have a strategy that is thought out and one that makes sure our staff are safe and we can successfully continue into the future. 

May - June 2020

COVID-19 GUIDE

The voice of business during the COVID-19 pandemic

‘COVID-19 has What happens if ripped off the band the US economy aid for the old way goes into of working’ meltdown? Page 26 Page 42 Business Leader - Inspire • Inform • Connect

What next for the M&A sector? Page 52

www.businessleader.co.uk 21

FROM THE EDITOR

WELCOME TO THE BLM CORONAVIRUS GUIDE Dear reader, You and your business will no doubt have been rocked by the coronavirus pandemic, the sweeping power of which has taken us all by surprise. The minute the pandemic took a stranglehold on our lives and the economy, Business Leader Magazine stepped in and launched a COVID-19 business support section online – giving you access to key information and inspirational stories. In this guide we have taken the best from this, to try to give you an insight into how different sectors are being affected and what the long-term impact on the global and national economy will be. The UK will no doubt slip into recession, potentially even depression, but as has happened in the past alongside the resolute public, it will be entrepreneurs and true business leaders that will ensure the UK economy rises from the ashes. Yours sincerely, Oli Ballard – Editor and Director, Business Leader

IN THIS EDITION 24 28 30 34 38 47 50

Roundtable debate: Future of Business Survey: Impact of COVID-19 Sector debate: Private Equity Sector debate: Recruitment Global Economy: USA Feature: How can leaders stay mentally strong? Interview: Lord Mark Price

M&A dealmaker speaks out about an economic downturn This is especially appealing to the business owner who wants to buy a business in order to add an additional income stream, or to expand into another territory.

Jonathan Jay

“A downturn shouldn’t prevent you from expanding by buying another business or three,” says Jonathan Jay, a veteran dealmaker who has made his fortune buying and selling businesses. Even when there’s a lack of available finance, it’s possible to structure deals so that no debt is required and also, in many cases, the buyer doesn’t have to use personal capital either.

“Buying a business without risking your own cash may appear to be a pipe dream, but those deals are out there if you know where to look." The key, says Jay, is to look for business owners who want to sell rather than businesses which are for sale. There’s a subtle difference. Jay rarely speaks to business brokers, preferring to deal directly with the owners themselves. As a result, he always manages to find outstanding deals. In one deal, he bought a business for £1 and less than eleven months later sold it

on for over one million pounds. With another, he bought a bust competitor and, as a result, added £4.5m to the exit price of the now enlarged company when he sold it five months on. These types of deals are easy when you know how, however, Jay emphasises that you need to have the right level of knowledge and professional support. In his spare time he advises business owners how to do deals and helps them with the details of getting the best deal and then getting it over the line. For a free copy of his book, Business Buying Strategies, go to www.thedealmakersacademy.com or search for the podcast of the same name

May - June 2020

DEBATE

‘COVID-19 HAS RIPPED OFF THE BANDAID FOR THE OLD WAY OF WORKING’ Business leaders discuss the impact of the pandemic

he business world may have changed forever because of COVID-19. But how are different sectors reacting and what do leaders think the future will look like? To answer these searching questions, BLM brought together a high-calibre panel of business leaders.

The aim of the debate was to look at how business leaders are responding to the challenges presented by COVID-19. The first question asked was, 'How is COVID-19 affecting your business and your clients?' Asma Bashir, who has run various businesses in her career, kicked off the debate by saying: “We have several businesses in our portfolio and were able to react very quickly. As soon as the government announced we were going into lockdown, we were able to respond efficiently due to the technology infrastructure we had in place. 24

“In regards to the shift to remote working, there was a high-level of excitement in the first couple of weeks, with working from home being a new experience and people feeling united with their families, but gradually it is starting to wear on people and the excitement has waned. “From an external perspective, the impact on our clients has been varied. For the start-up clients we deal with, they are being challenged by cashflow, their business runway in terms of funding and also how they navigate the various government schemes. “For our larger customers, we have had challenges with their expat population and people being stuck in other countries and we’ve been trying to support them with crisis management and getting them the advice and support they need.” On how Vodafone is responding, Paresh Modi, comments: “We have 100,000 employees across the world and 95% are now working from home. “We have also seen a 50% increase in

broadband traffic and, somehow, we have managed to keep the networks going by using our technology to push bandwidth levels at short notices through clarified structures. In our business we are having 40,000 virtual calls happening every day in our employee base. Keeping that up and running was a monumental task. “We have also been quick to support our customers, by shortening our payment terms to give them cashflow and also by setting up affordable business accounts and infrastructure for companies that may not be used to remote working.” Paul Beach has a large client base consisting of entrepreneurs and private businesses. On how they are being impacted, he said: “Our private clients have been looking at how the wealth they have created is being impacted by the volatile nature of the global oil and equity markets. It’s an uncertain time and naturally this client base is seeking advice and clarity. “For our entrepreneurial clients, it has been interesting to see how they have been innovating and pivoting during this time. May - June 2020

FUTURE OF BUSINESS

Asma Bashir Chairman Centuro Group

"For example, we work with a business called Seven Cherries – an ethical catering firm – who have moved into home deliveries across London. “Another business, Twipes, has also responded by moving their whole business online and into a B2C model, where they can deliver disposable wet wipes to UK households.” One sector that has certainly been impacted by COVID-19 is events. Johnny Palmer has looked to try and find opportunities though, as he has explained: “Our industry (events) has been affected more than any other and it does not exist now. This made us look at our priorities – which are our clients and employees and for the former we have been looking at how we can host their events virtually and also help them with advice around venue contracts and ticket prices.

THERE WAS A HIGH-LEVEL OF EXCITEMENT IN THE FIRST COUPLE OF WEEKS, WITH WORKING FROM HOME BEING A NEW EXPERIENCE AND PEOPLE FEELING UNITED WITH THEIR FAMILIES BUT GRADUALLY IT IS STARTING TO WEAR ON PEOPLE AND THE EXCITEMENT HAS WANED. Asma Bashir

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Paresh Modi Group Head of Business Development & Innovation, Vodafone

“In response to COVID-19 we have also developed our own education learning platform called Intelligo, and we have also launched a new online platform to host conferences. As a business, we are reacting where we can.” One of the biggest challenges for many businesses during COVID-19 has been accessing vital funding and navigating new government structures and systems. To get an insight into the pressures this is putting leaders under, Dr Oliver Prill was asked to give his thoughts on the current funding context. He said: “At Tide, we have 150,000 SME business customers, which is one in 40 of all UK SMEs, so this allows us to see the whole spectrum and it is very tough for them now. The sad story is that the UK government’s business response is well intentioned – as from a Conservative Government this is unheard-of generosity – but the execution has been found wanting, as large parts of the government machine are not working at the level that they are required to work. “This is in part because they have never had to work to this scale, but they too also have high rates of absenteeism which makes things difficult. We are trying to be supportive of government when representing our members but we also need to pick out these execution gaps. “The grants on offer only apply for one fifth of all SMEs because many small firms do not pay rates; and the loans have been an

Paul Beach Director, Private Banking Arbuthnot Latham

absolute disaster, as only 1% of SMEs have been able to access one. “Many companies are going to go into hibernation unless funding kicks in and investors will only inject funding if they see a light at the end of the tunnel and a coherent plan.” Andrea Reynolds sits on a fintech consortium which is talking to government about the challenge’s businesses are facing. On this subject, she said: “We have seen a 1000% increase in customer demand and we are also seeing lots more mature and traditional businesses looking for funding, which we didn’t see before COVID-19. “Businesses heard amazing things from the Chancellor, such as the £330bn fund, and if you’re in business you assume it will be available to you, but the navigation has been very difficult. There is a huge disconnect between the announcement and reality and you have a situation where the lenders are inundated with demand and the business is stuck in the middle. “The system should be centralised so businesses can see who they can receive a loan from because now they going to their bank, being rejected, and not seeing the other lenders that are available. “The bandwidth for execution is not there and although government is moving at a faster pace than they ever have in their history, it is just not fast enough for business.” Cont.  25

DEBATE

Johnny Palmer Founder & Managing Director SXS Events

Jackie Fast Entrepreneur, Author & Speaker

Dr Oliver Prill CEO Tide Bank

John Stapleton Entrepreneur, Speaker & Investor

Individual investors, like large funders, are vitally important to the business ecosystem and COVID-19 has naturally shaken portfolios. To find out more, Jackie Fast, explained: “I own a wine business and that is dead at the moment, but what you are seeing in this space is that Sommeliers and highprofile people within the drinks industry are building their own personal profiles with events like wine tasting and cocktail masterclasses. “They are building their profiles, rather than thinking only in a commercial sense. “What has surprised me is that in one of my companies – a luxury handbag brand – business is booming. It must be that people are sitting at home and happy to drop a large amount of money on a handbag, as they are not spending it elsewhere.” John Stapleton, who is also an active investor – particularly in the food and drinks sector – added this when talking about 26

Andrea Reynolds Founder & CEO Swoop

Pat Lynes Founder & CEO Sullivan and Stanley

investor sentiment and how the sector is being impacted. He said: “There are positives and negatives from COVID-19, depending on the industry you operate in, what your route to market is and what stage of growth your business is at. In food and drink you have of course seen many companies diversifying and moving supply online where they can, as this is where there is now an opportunity. “I am also seeing an investment mismatch, where investors think valuations should be coming down – given the challenges businesses face – but business owners argue that this is just temporary and they’re saying 'come back to me later in the Summer as I’m holding my valuation'. “Going forward, I feel there will be a boom in investments once we begin to come out of this as there is pent-up deal flow and where businesses can demonstrate momentum they can attract investors and reasonable valuations.

Gary Fletcher Managing Director South Gallagher

“Generally, the fundamentals of your business need to kick back in. Hold tight, conserve your cash, get in what you are owned and do not spend where you don’t need to. Try to return to momentum and focus on making the second half of your year successful by preparing for the 'new normal'. You need to turn uncertainty today into competitive advantage tomorrow.” The debate then moved onto remote working in more detail. To find out how organisations are responding to remote working, we spoke to Gary Fletcher. He said: “Our business is spread over seventy offices and prior to COVID-19, we didn’t operate with many of our staff remote working. But we are robust as an organisation and we had a well-tested business continuity plan in place in the event of something like this happening. We did not expect to have to move our entire estate in one go but we did it; and the implementation has been very successful. “We are proud of what we have achieved, as we did not expect to have to do this on such a big scale. For our customers we’re also proud to be giving them ‘business as usual’ service and investing throughout this period to support them. They are talking to us about cyber risk, unoccupied premises and other matters and we are working hard to be by their side. May - June 2020

FUTURE OF BUSINESS “Back to our people, the challenge has not been the move, but it’s been about how we communicate with them. This is important from a wellbeing perspective and keeping our culture going is our focus now.” Inspiring remote works is all about strong leadership. To find out how COVID-19 is changing the way we think about leadership, Pat Lynes gave his thoughts. He said: “Many businesses are hibernating, cutting costs to the bone and retreating but I think the ones which will come out stronger from this will do the opposite reset, reorganise and reinvent; and this comes down to strong leadership and a clear vision for the future. “This challenge has given us a free pass to assess how we operate as leaders and to rethink how we want our organisations to be. COVID-19 has sped up the future of work as it has ripped off the band-aid for the industrial world of work, moving away from hierarchy and control to a more servant style of leadership, based on trust, collaboration and empowerment. “Most executives and change experts I’ve spoken to do not want to go back to death by business case, analysis paralysis and slow decision-making indicative of hierarchical structures. So, I’m hoping to see less time and activity-based management to more inspiring leadership with a product and services-based outcome, which is focused on the delivery of value to customers and the bottom line. “The recent World Economic Forum at Davos predicted that the businesses who will thrive in this decade will be those that embrace change as a constant and bring learning back into their organisations.” Pat added: “I believe that the leaders who put change at the heart of their agenda and capability will be the organisations that succeed.”

The debate then looked at mergers and acquisition activity and whether this will increase going forward, as stronger companies look to acquire weaker ones. Paul Beach said: “I think that could increase in the future but, initially, the concerns are around funding companies and investors. The number of deals has fallen very low in the last few weeks and possibly as low as 2014 numbers. “Some deals are still going ahead though and there is some positivity out there. Investors are taking longer to go through the deals though and there is less money involved and lots of deals are going into follow on deals.” Asma Bashir added: “I relate it to 2008 and the recession back then. We were approached to be acquired and, because of the challenging conditions, I considered it, but I stood my ground and we waited it out. Rather than focus on activity in the UK, we pivoted into new markets and became a global business. This decision in 2008 changed the landscape of our business and we became a large company off the back of it. “I would say if you can survive without being bought, I’d hang on and look at how you can enter new markets and how you can innovate. If you can get through this, it transforms you as a leader and it can inspire people. Difficult times are the real test that can show your resilience as a leader. “Overall, M&A activity is there but if a company is just looking at this as a way to resolve cash flow, there may be other things they can do to solve this issue.”

“I remember the 1990 recession well, as we had set up New Convent Garden just before. We were scared at what might happen to our early-stage business, but our sales rose during the economic downturn. In recession, consumer behaviour shows that people trade up and they trade down simultaneously. They trade down from going out, but they eat in much more, so our sales of New Convent Garden Soup rocketed. And they traded up to consumption of premium products in the home – consumers don’t want to eat staples all of the time. We’re undoubtedly heading into a recession following this first COVID wave. Those who understand their consumer base and have an insight to how their behaviour will likely change post COVID, will be ahead of the game of survival come the recession.” The debate concluded by talking about how leaders themselves can stay mentally resilient during this period. When asked how he keeps himself motivated during this time, Johnny Palmer said: “The first thing I did was launch a campaign called 'Boss Take it First'. In the early days of this crisis, when people were not behaving well and putting their own shareholders and dividends ahead of their staff, I felt that leaders needed to be practically and visibly taking the first hit. The boss needs to get paid less and the boss’ net worth needs to get hit first. “This is about strong leadership and a statement to your staff. You also need to work on your mental and physical fitness as a leader, to make sure you can look after everybody else.” 

John Stapleton also said: “Being an entrepreneur is all about taking advantage of tough situations. It is not just about being prepared, it’s about being more prepared than the other guy – and that’s about developing a competitive advantage.

WE HAVE ALSO SEEN A 50% INCREASE IN BROADBAND TRAFFIC AND, SOMEHOW, WE HAVE MANAGED TO KEEP THE NETWORKS GOING BY USING OUR TECHNOLOGY TO PUSH BANDWIDTH LEVELS AT SHORT NOTICES THROUGH CLARIFIED STRUCTURES. Paresh Modi

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SURVEY

BUSINESS LEADER SURVEYS THE NATION ABOUT COVID-19 HAS THE CORONAVIRUS IMPACTED YOUR BUSINESS?

YES NO

PEOPLE POLLED JUST UNDER

18%

82%

GOVERNMENT SUPPORT

SATISFIED

1,000

64%

RESPONDED

36%

NOT SATISFIED

usiness Leader Magazine has a strong and growing readership of leaders, investors and professionals that are the heartbeat of the UK economy. The COVID-19 pandemic has no doubt rattled them, but from talking with leaders in every corner of the country, there is also a sense that they will rise again and there is light at the end of the tunnel. To gauge how they are feeling during this challenging time, we sent a survey out to our readership and just under 1,000 responded. Here are the results.

The first question in the COVID-19 business reaction survey from BLM asked respondents, ‘Has the Coronavirus negatively impacted your business?’ Unsurprisingly, an overwhelming 82% said it had, against 18% that said it had not. Since COVID-19, some sectors, such as online retail, distribution and fast-food outlets have reported an upswing in business – providing an antidote to what has been a generally difficult time for industry.

Business Leader has been hearing first-hand from companies struggling to access Coronavirus Business Interruptions Loans (CBILS). But conversely, there has been widespread support for the Furlough Scheme, which is allowing businesses to pay workers up to 80% of their wages during this period, underwritten by the government.

Following this, the survey asked if business leaders have been satisfied with the government response to support the UK economy and businesses. 64% of those that answered said that they were happy with the packages offered to businesses, but 36% said they are dissatisfied by the response.

May - June 2020

IMPACT OF COVID-19

PERCENTAGE WHO APPLIED FOR GOVERNMENT LOANS

PERCENTAGE WHO WOULD KEEP REMOTE WORKING IN PLACE

NO 32% YES

YES

68%

65% YES

90%

BELIEVED THE UK ECONOMY WOULD ENTER A DEPRESSION

YES

DO YOU HAVE ENOUGH INFO IN RELATION TO THE FURLOUGH SCHEME?

85%

15%

Business loans Interestingly, at the time of the survey, a majority 68% said they had not actually applied for a government support loan against 32% who said they had. This figure may have changed now but sheds a light on business behaviour – suggesting that cash reserves were stable or that the scheme is overcomplicated, and business leaders were looking at other funding avenues. What does seem to have been a relative success for employers and employees – although there will always be exceptions – is the furlough scheme. The results from the survey question; 'Do you feel you Business Leader - Inspire • Inform • Connect

have enough information in relation to government’s furlough scheme?', revealed that 85% did and that they were generally happy with the how the scheme had been administered, against 15% who said they were not. The survey polled employers, so would be interesting to also have an employee perspective. Remote working The survey also asked about remote working and whether businesses who did not typically implement remote working would continue to do so when the ‘lockdown’ had ended, and government instructed that it was OK to go back to work. 65% of those surveyed said that they would keep remote working in place, suggesting that a paradigm shift in how we work is happening. 35% said that they would return to working in an office environment only when safe to do so.

The future of work has been one of the most common subjects that BLM readers have been talking about. It seems that advances in technology and more grown attitudes from leaders around how they lead their teams, will see a proliferation of more flexible and homeworking, which was backed up by the survey. Economy The poll ended on a worrying note, as the final question asked business leaders if they believed the UK economy would enter a depression. A whopping 90% said they believe it will, with just 10% saying that the UK economy will not enter a depression. With many of our readers at the coalface, leading in sectors such as finance, recruitment, construction, food and drink, and more, the answer to this question does suggest that tough times lie ahead for all.  29

SECTOR REPORT

PRIVATE EQUITY AND ITS ROLE IN BRITAIN’S ECONOMIC RECOVERY

o find out what impact COVID-19 is having on various sectors, BLM set about bringing together experts to provide analysis and insight. Here is a report into how private equity is being influenced and what investors should be aware of.

The relentless progress of the coronavirus is pummelling life and business in the UK in a way that hasn’t been seen since World War Two. The health of the nation has been shifted to the center of importance, with UK businesses effectively put in lockdown to tackle the spread and save lives. 30

To find out how different sectors are being impacted and reacting to the spread of the disease, BLM talked with sector leaders across retail, construction, tech and others. In this article, we look at how the private equity (PE) market is reacting to the crisis. HOW IS THE PRIVATE EQUITY MARKET REACTING TO THE CRISIS? Leigh Webb – finnCap Group plc: "The overriding view of many people in private equity is that there is a need for PE funds to fully focus on supporting their portfolio companies and their incumbent management teams. Every firm is looking closely at how well capitalised their portfolio companies are, including carrying

out stress testing to assess what the impact might be after, say, three or six months, if the situation does deteriorate further. "Some PE funds are also doing scenario planning, to plan for the possibility of broken supply chains or companies facing other operational difficulties. "However, I’m sure that in the medium term most PE funds, given the amount of dry powder they have at their disposal, will consider committing capital – if and when the right opportunities present themselves." Asma Bashir – Centuro Global: "Having been involved in the world of investments, including Private Equity and Venture Capital (VC), for the last few years I am seeing a May - June 2020

PRIVATE EQUITY

Leigh Webb - finnCap Group plc

Asma Bashir - Centuro Global

very mixed impact on this industry group as a result of the coronavirus. "Given the mass disruption to all businesses globally, particularly amid social distancing measures, PE and VC firms have had to move fast to ensure the continuity of all critical processes." Matthew Connor – Calculus Capital: "We are still seeing new opportunities and continue to pursue opportunities. We are in the later stages of due diligence with a virtual reality gaming company, which has seen a 20% uptick in sales recently as result of the lockdown (at the time of writing). Generally, problems for companies will be in sales, supply chain disruption and, where relevant, in installation and fulfilment. It’s a national and a global challenge, and certainly something we will look at closely before making an investment."

THE OVERRIDING VIEW OF MANY PEOPLE IN PRIVATE EQUITY (PE) IS THAT THERE IS A NEED FOR PE FUNDS TO FULLY FOCUS ON SUPPORTING THEIR PORTFOLIO COMPANIES AND THEIR INCUMBENT MANAGEMENT TEAMS. Leigh Webb

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HOW ARE PE FUNDS BEING AFFECTED? Leigh Webb: "Going into January, the mood in private equity was extremely buoyant. Political and wider uncertainty has eased off significantly following the General Election, and the Brexit issue was largely settled. "PE funds were looking forward to a promising nine months before the UK’s final departure from the EU, which would likely have seen significant deal flow. "This optimism has now dissipated for the time being, although it must be said that the private equity industry is very resilient, and any concerns will be short-lived. Over the last month the industry has been a taking stock of where we are and, as a result, many PE funds are looking at the longer term. "This means pausing, focusing on the assets they already hold and making sure they are in as strong a position as possible before beginning to assess new opportunities." IS MORE OF THE INVESTMENT NOW TURNING TO COMPANIES THAT HAVE LIQUIDITY PROBLEMS – TRAVEL, RESTAURANTS, ETC? Leigh Webb: "This is possible, but I think it will likely fall to turnaround funders who

Matthew Connor - Calculus Group

are specialists, who will be attracted by the prospect of historically high-caliber assets becoming available at an attractive price because of the economic situation we find ourselves in. "These funders will of course be best placed to capitalise on distressed assets and will play a key role in rebuilding businesses, which will in turn help the wider UK economy to recover." Matthew Connor: "The majority of Calculus’ portfolio is not in “at risk” sectors. Calculus’ portfolio mainly consists of software and healthcare businesses. "Where possible, these businesses have moved to remote working to minimise interruption, and to continue to offer their services. "Nonetheless, sales may decrease, meaning the cash management practices are important. Each company is also taking this as an opportunity to strengthen relationships with their customers – seeing if they can tweak their offering to better suit the customer during these trying times."

Cont.  31

SECTOR REPORT

PRIVATE EQUITY

WHAT OTHER TRENDS ARE YOU SEEING IN THE MARKET? Leigh Webb: "I think we will still see deals being completed in the coming weeks and months. However, these will be deals that were already approaching the final stages pre-coronavirus, such as those where perhaps site visits and management meetings had already taken place, and with due diligence well underway. "Transactions will take longer than previously anticipated, but I’m sure we’ll see some announcements, and the market will certainly bounce back once we have clarity on the likely timescales of this unfortunate global pandemic." Matthew Connor: "We are seeing a number of our diagnostic focused portfolio companies pivot their expertise towards helping in the fight against coronavirus, including Mologic, who received a visit from Boris Johnson in early March, as they have been awarded a grant to develop a rapid test for the disease.

FOR CRITICALLY IMPORTANT SECTORS SUCH AS HEALTHCARE AND FOOD RETAIL WHICH ARE AT THE FRONTLINE OF BATTLING THE VIRUS, DEMANDS HAVE INCREASED AND THE MAIN CHALLENGE HAS BEEN AROUND MAINTAINING THE SUPPLY CHAIN. Asma Bashir

THERE IS NO EDUCATION LIKE ADVERSITY When he uttered the immortal line “there is no education like adversity”, one wonders whether former prime minister Benjamin Disraeli believed his words would remain so relevant over 140 years later. Few of us could have foreseen the impact of the coronavirus pandemic on the business world. However, these challenging times Simon Hore - Partner, Thrings have presented organisations with an opportunity to step back and learn more about themselves. Indeed, it has been fascinating to hear how clients and business advisers are using this period to take stock and look forward. For some businesses, this will only be possible once the current situation stabilises. To that end, advice on what measures and support should be considered has been made widely available – including by my own firm – to help businesses benefit from initiatives such as the Coronavirus Job Retention Scheme and Government-backed loans. As advisers, we have, more than ever, focused on having regular dialogue with clients. Many have sought an independent perspective on their business; we have been invited to join virtual board meetings and management discussions, with topics ranging from cash management and supplier contracts to international markets and diversification.

"Genedrive has focused part of its core resources towards development of two SARS-COV-2 tests, which can determine whether someone is infected with coronavirus. Finally, Yourgene Health signed a manufacturing agreement with diagnostic group Novacyt to make tests for the virus, with the first batches to be shipped from the Manchester site in the next few weeks."

Almost overnight, businesses have reacted to new ways of working, remote working being a good example. There was undoubtedly scepticism about ensuing efficiencies in certain quarters, but a number of companies have been pleasantly surprised. Many businesses and employees will still want a central office hub and human interaction, but could a greater focus on agile working and flexible workspaces, coupled with further advances in technology, lead to more businesses reassessing their plans?

Asma Bashir: "Depending on the industries each PE firm operates within, there have also been different levels of impact. For critically important sectors, such as healthcare and food retail which are at the frontline of battling the virus, demands have increased, and the main challenge has been around maintaining the supply chain. On the other hand, the hospitality, leisure, and tourism sectors have taken a massive hit.

It has also become increasingly essential to maintain relationships with fellow professional advisers. We have seen a rise in the number of online networking events, with few participants seemingly missing the early-morning drive to the meeting. Closer to home, the strong take-up of our Property Development team’s online webinars suggests there is a genuine demand for events in this format.

"I am currently working with a number of tech companies who are making fantastic differences in healthcare and also a handful of food distribution services, who have benefited from stay at home measures. Leaders in the PE and VC spaces need to think carefully about how time and resources are allocated to the various portfolio companies, to ensure maximum potential gains and accepting losses that are less recoverable."  32

To echo Mr Disraeli’s sentiments, now is the time to reflect, learn and make strategic decisions which will allow businesses to thrive once normal service resumes. And it will happen – it’s just a question of when.

T: 01793 412611 | E: shore@thrings.com WWW.THRINGS.COM

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SECTOR REPORT

HOW HAS COVID-19 AFFECTED THE RECRUITMENT SECTOR?

o find out what impact COVID-19 is having on various sectors, we set about bringing together experts to provide analysis and insight. Here is a report into how the recruitment sector is being influenced and what investors should be aware of. One of the main sectors that has been impacted by the pandemic is the recruitment industry. Business Leader spoke to some of the countryâ&#x20AC;&#x2122;s leading businesses within the recruitment space to find out what has happened, and what the future holds. WHAT IMPACT HAS THE COVID-19 CRISIS HAD ON THE RECRUITMENT SECTOR?

The BLM Recruitment Panel

Caroline Gleeson CEO and Co-founder Occupop

Steve Preston Managing Director Heat Recruitment

Spencer Berry Business Development Director Berry Recruitment Group

David Morel CEO Tiger Recruitment

CG: "The COVID-19 pandemic has had a significant impact on recruitment. The lockdown and isolation policies mean that many businesses have been forced to shut or downsize. "There has been mass layoffs and a significant reduction in working hours across industries like retail and hospitality. As a result, many organisations have put their recruitment on hold until the crisis ends. "For those industries still recruiting, social distancing makes the task more difficult; much of it has to be done online rather than face to face.

getting sick and, for industries like healthcare, there are added challenges due to urgency as companies try to ramp up staff numbers in preparation for high levels of outbreak.

"In recruitment terms, the most affected by the crisis in the sector are probably the recruitment agencies themselves, particularly those that target the most affected THE COVID-19 industries. PANDEMIC HAS HAD A

SIGNIFICANT IMPACT ON RECRUITMENT. THE LOCKDOWN AND ISOLATION POLICIES MEAN THAT MANY BUSINESSES HAVE BEEN FORCED TO SHUT OR DOWNSIZE.

"There are fewer candidates due to the virus, either through sickness or fear of

"Because agencies tend to be very costly compared to the available technical solutions, it may be a significant amount of time before companies start to outsource the process again."

SP: "The impact has quite simply been huge, as companies have either put a recruitment freeze in place or shifted start dates. Caroline Gleeson

May - June 2020

RECRUITMENT

"The strange thing is that unlike the recession of 2008 where people couldn’t recruit due to the lack of funds, this is different as companies and clients want to recruit, they just simply can't due to the nationwide lockdown. "The unknown entity is the big problem as to how long will this go on for? "Recruitment is high energy, high stress and high social at the best of times, my concerns surround people’s well-being, so at Heat Recruitment, we are making sure that team chats happen and that everyone is being spoken with on a regular basis, so that nobody feels isolated in these days of self-isolation." SB: "COVID-19 has infected the whole economy, including the recruitment sector. Between February and March, employer confidence in the economy plunged by 22 percentage points, according to the specially-commissioned COVID-19 REC Jobs outlook survey. "The sector, however, is huge, and within it some areas have been hit hard and others have in fact prospered. "The same REC survey showed that shortterm demand for temporary workers shot up by 15 percentage points. "And this reflects what we have been seeing throughout the group, which works from nearly 40 locations across England and Wales. "Jobs for some temporary staff, including roles in retail, hospitality and leisure, simply stopped overnight. Business Leader - Inspire • Inform • Connect

"However, other jobs including those in supermarkets, food production, delivery and cleaning became plentiful."

SP: "The recruitment sector is a strong and resilient industry and I believe it will bounce back and bounce back stronger.

DM: "As a business, we’re seeing far fewer new roles coming through. Between March 2nd and March 20th, we saw a 70% reduction in new permanent jobs briefed to us, and most live roles we’ve been recruiting for have been put on hold. That gives some indication of the extent to which businesses have retrenched.

"Initially, the sector will be leaner with the headcount and numbers working in the sector, especially as a lot of agencies have used this time to reduce their headcount.

"Of course, there are some sectors still hiring. Businesses whose services are experiencing a surge in demand in the current crisis all have roles to fill. This includes companies in tech and fintech, business restructuring, delivery and logistics, or businesses enabling and supporting remote working and homeschooling."

COVID-19 HAS INFECTED THE WHOLE ECONOMY INCLUDING THE RECRUITMENT SECTOR. BETWEEN FEBRUARY AND MARCH, EMPLOYER CONFIDENCE IN THE ECONOMY PLUNGED BY 22 PERCENTAGE POINTS, ACCORDING TO THE SPECIALLYCOMMISSIONED COVID-19 REC JOBS OUTLOOK SURVEY. Spencer Berry

HOW DO YOU FEEL THIS CRISIS WILL AFFECT THE RECRUITMENT SECTOR IN THE LONG-TERM? CG: "Post-COVID-19, I believe we will see the emergence of a new norm, including significant changes and innovations, plus the introduction of new processes in a historically traditional industry. "Some changes we can definitely expect to see are: much of the interview process moving online; greater utilisation of recruitment technology; a review in employment contracts and employee benefits; availability of flexibility and remote working options; a workforce openly and actively seeking to reskill; more conscientious spending and frugality with regards to recruiting; and a more long-term focus on recruitment strategy and budget."

"I believe the government's Furlough Leave system will protect far more people, than had we not had this in place. "The government's release of £330bn to fight COVID-19 will eventually find its way into the day-to-day economics and movement of monies." SP: "The pressure for us was, and remains, to reassign our legion of brilliant temporary workers from those areas that have closed down to those areas that are creating jobs. "We also recruit key workers in a variety of roles, from the NHS and probation services to prisons, rail and waste. Clearly the need to fill those roles became uppermost in our list of priorities. "Another area that is creating jobs, with more to follow, is agriculture. With international workers unable to travel, there is a fear that crops will rot in fields and greenhouses. "In the long term we will see the industry bounce back because it is enormous – it turns over nearly £50bn a year – and is therefore extremely important to the economy. Of course, nobody knows quite when this will happen." DM: "It is impossible to say what the impacts will be, but I am working on the basis of a 'V' curve or a flat-bottomed 'U' curve, and expect business to bounce back relatively quickly once the outbreak has ended. This is on the proviso that the lockdown finishes between mid-to-late May. "The government’s measures, specifically the furlough scheme, will have a significant impact on businesses’ ability to retain their staff. This will make it quicker and easier for companies to return to previous levels of productivity, which can only be a good thing for the recruitment sector."

Cont.  35

SECTOR REPORT

RECRUITMENT

IN WHAT SECTORS ARE YOU SEEING DEMAND FOR JOBS? CG: "Most sectors have been affected negatively by the global pandemic. We have seen huge declines in roles in the hospitality sector, for example. But some industries are under severe pressure to grow or in some cases are thriving. "Healthcare and facilities services are two industries where we are seeing huge growth in job numbers and demand for candidates. "Food production and supply chain, to a lesser extent, are also growth industries currently seeking out talent. "Interestingly, with all the remote work taking place, the telecoms and utilities industries are thriving with a surge in demand for workers. The demand for these roles is increasing due to the rise in the demand for their services, so companies do seem to be hiring quickly in order to fill these spots."

SP: "The medical industry is an obvious area, but equally IT roles, especially those working to assist people to set up and work from home. "Government-based roles are still there and roles that would have been a remote/home working role irrespective of the impact of

COVID-19. I’m pretty sure that at the end of this lockdown hairdressers are going to be in demand, as will the increase on conveyancing as people are allowed to move home and purchase properties." 

UK shoppers spent £1.9bn stockpiling in the run-up to the national lockdown

Almost 150,000 firms claim coronavirus wage bill help on opening day Almost 150,000 firms applied for the government's coronavirus wage bill payments on its first day (20/4/20), according to HMRC. The scheme funds 'furloughed' workers 80% of their wages, up to £2,500 a month. Chancellor Rishi Sunak said the money would help pay the wages of more than 36

a million people across the UK, however, many thousands more are currently waiting to apply or receive advice on the next steps. HMRC announced that the system can process up to 450,000 applications an hour and that businesses should receive the money within six working days of making an application.

Shoppers across the country spent £1.9bn when stockpiling groceries and products in the weeks leading up to the coronavirus lockdown. Nielsen announced that there had been an 84% growth in frozen food sales across the grocery sector last week alone, compared to the same period in 2019. The data from Nielsen follows the news that several retailers have fallen into administration and thousands of workers are now out of work. May - June 2020

ADVERTORIAL

LM caught up with Hannah Collins, Chief Executive Officer of Virtual PA London, to talk about how they are helping businesses during the COVID-19 crisis.

FIRSTLY, CAN YOU TELL READERS ABOUT HOW YOU LAUNCHED THE BUSINESS? Sure - I worked in the city for over ten years as an Executive Assistant and following maternity leave in 2019, I requested to work from home a few days a week to have a more work/lifestyle balance. However, my request was rejected which lead me to resign. I have always loved working and I didn’t want to have to stop this just because I was now a mum. This is what inspired Jess and I to launch Virtual PA London – we have never looked back. Virtual PA London started with myself supporting a few daily clients and before I knew it, I was receiving a high volume of requests and was quickly at full capacity this is when it became a business and we have grown to a team of 20 in just under one year of trading. I am a massive believer of everything happens for a reason – anything bad that happens, try and flip that negative into a positive. WHAT DOES VIRTUAL PA LONDON OFFER BUSINESSES? Virtual PA London provides businesses and individuals with Virtual Assistant (VA) support to carry out various tasks. Our clients are assigned a dedicated VA to carry out all duties on their behalf, so that they can focus on their key priorities and business profits. Although your VA wouldn’t work from your office location, you are able to contact your dedicated VA throughout core business hours via various methods – audio, email, WhatsApp and Zoom. Business Leader - Inspire • Inform • Connect

Hannah Collins

Has the way we work changed forever?

HOW DO YOU FEEL THE COVID-19 CRISIS WILL INFLUENCE THE APPROACH TO REMOTE WORKING? Many businesses are now having to embrace remote working, but this is nothing new to us, as we’ve been supporting businesses that operate remotely for over a year now. We know what does/doesn’t work well and we’re seeing a huge uplift in the number of companies getting in touch with us to find out more. Over the last year, we’ve seen a huge shift in the number of companies moving to remote working and this has naturally now been accelerated and when this crisis is over, we expect many businesses to stick with this new approach to working. It saves businesses money and allows employees to benefit from a better work life balance; as well reducing carbon emissions and wasting less time stuck in traffic. We’re all now becoming much more familiar with modern day technology such as Zoom and how we can potentially have six or seven meetings in a day, where we present a slide deck by sharing our screens opposed to spending hours upon end commuting; saving time and increasing productivity. CAN YOU EXAND ON THE SERVICES YOU CAN OFFER BUSINESSES AND HOW THEY CAN BENEFIT FROM THEM? Yes, of course. Virtual PA London provides PA and administrative support virtually – we have clients across multiple different sectors and across the globe. The way it works is that you can hire a dedicated VA from as little as two hours per

day, five days a week. The number of hours you hire your VA for are covered throughout the day, opposed to in a consecutive block this ensures nothing is missed and time isn’t wasted. Our clients feel as if they have a full time PA onboard, but at the fraction of the cost it would normally be. The service is extremely cost effective and approximately 75% cheaper than hiring a full-time employee. You also benefit from not having any HR burden or expenses (i.e. pension, sick leave, annual leave) and you operate on a one month rolling contract. Our client retention rate is extremely high – we believe this is down to our effective model, hourly rate and the in-depth experience of our VAs. HOW DO YOU ENSURE THAT THE PAS/EAS ARE OF THE HIGHEST QUALITY? All our VAs have a minimum of 10 years PA/EA experience - an extensive recruitment process is carried out when a new VA comes onboard to ensure they have the correct skillset and are able to hit the floor running. Virtual PA London matches clients and VAs together based on their personality, skillset and sector they work in. THE MILLION DOLLAR QUESTION - DO YOU BELIEVE THE WAY WE WILL WORK IN THE FUTURE HAS CHANGED? Absolutely!

YOU CAN FIND OUT MORE ABOUT OUR SERVICES AT WWW.VIRTUALPALONDON.CO.UK

FEATURE

WHAT HAPPENS IF THE US ECONOMY GOES INTO MELTDOWN?

hen the US economy starts to wobble, typically the rest of the world falls over and following the acceleration of the COVID-19 crisis in the world’s largest economy – and some heart-stopping headlines around unemployment and infections – BLM looks at what is next for the US economy.

Dr Tony Syme, expert in macroeconomics and international finance at the University of Salford Business School, believes that the US economy is in for a rough time. He comments: “The economic pain felt by Americans will be severe, but short-lived if the experience of previous pandemics is anything to go by. “The Federal Reserve’s estimate of 47 million lost jobs and an unemployment rate of 32% at the peak of the crisis do not appear to be the work of doomsayers, given the latest economic data. “A record 6.6 million people filed for unemployment benefits and that record is likely to be broken again this week, while IHS Markit reported that their purchasing 38

managers index (PMI) for the services sector hit a record low of 39.1 for March – readings below 50 signal a contraction in the sector. “Travel restrictions and the spread of the coronavirus meant that most business in the tourism, leisure and hospitality industry were going to close, even without the government-mandated closures. For those Americans who remain in employment, the opportunity to spend their income is being severely curtailed. In short, there will be a period of forced saving for those who remain in work.” President Trump’s response Pre-pandemic, some prominent business leaders in the United States were relatively happy with President Donald Trump’s handling of economic affairs, but his failure to grip the crisis early – and his seemingly blasé responses to the media – has seen that good sentiment wane.

THE ECONOMIC PAIN FELT BY AMERICANS WILL BE SEVERE, BUT SHORT-LIVED IF THE EXPERIENCE OF PREVIOUS PANDEMICS IS ANYTHING TO GO BY. Dr Tony Syme

So, how bad will it get and what can we glean from history? Dr Syme says: “Such restrictions as we’re seeing now were implemented after the outbreak of the 1918 influenza pandemic which killed up to 50 million people worldwide, including over half a million in the United States. "While there were distinct waves in that pandemic, due primarily to demobilisation following World War One, there was also a rapid increase in consumption patterns and business activity once the pandemic had subsided. “The longer-term impact of the 1918 pandemic was a labour shortage and an associated increase in wages. That is unlikely to be the impact of the current pandemic, as it is currently affecting a different demographic: in 1918, a disproportionate number of the victims were men and women aged 15-44; the current virus is disproportionately affecting those of retirement age. “The longer-term impact of the current pandemic will depend on the length of the current lockdown measures and the likelihood of any future waves, and upon the government responses to funding the current bailouts. May - June 2020

US ECONOMY

“It is too early to forecast the future path of the coronavirus and the degree to which civilian restrictions will remain in place, but one thing is clear when the pandemic passes: no government will want to pay for the stimulus plans by raising taxes.” Finally, a serious reaction Whilst Trump has been criticised for his sluggish response, he has at least now responded with an unprecedented economic shot in the arm for the USA, but it’s still way behind many other nations. Dr Syme explains: “The scale of these stimulus plans is huge. President Trump has signed a $2tn (£1.6tn) stimulus bill, which equates to 10% of GDP. But that is small-scale to some of those in place in Europe: the UK stimulus package equates to 17% of GDP and the German package equates to 21% of GDP. “And this is where there is a significant difference between the American and the European government responses to the crisis. Whereas loans to businesses are commonplace to ease cash flow problems, the American bill contains direct payments of $1,200 (£1,000) to adults, whereas European responses provide direct subsidies to businesses to encourage them to retain their staff. “The huge increases in unemployment seen in the US are not being seen in Europe as a consequence of these schemes, such as the Kurzarbeitergeld scheme in Germany. Business Leader - Inspire • Inform • Connect

PRESIDENT TRUMP HAS SIGNED A $2TN (£1.6TN) STIMULUS BILL, WHICH EQUATES TO 10% OF GDP. BUT THAT IS SMALL-SCALE TO SOME OF THOSE IN PLACE IN EUROPE: THE UK STIMULUS PACKAGE EQUATES TO 17% OF GDP. Dr Tony Syme

"But with all these schemes, these are just the initial government responses. “The longer that the current crisis continues, the more expensive these worker-subsidy schemes will be and the more often direct payments will need to be made to families by governments that follow that strategy. “The long-term impact may be that governments will respond to this huge increase in public debt as they did after World War Two. Those that borrow in their own currency cannot go broke. They only require their large fiscal deficits to be fully underwritten by central banks and it is those central banks who control the supply of the currency. “Modern Monetary Theory has the potential to be the new economic orthodoxy in the post-crisis era. There are few alternatives. No government will want to raise taxes and no population will allow their health system to be so under-prepared for the next health crisis.”

That transatlantic relationship Chris Manson is CEO of Newable, an organisation which supports businesses looking to trade with the USA. His view is that the economic impact will only be temporary. He comments: “The COVID-19 pandemic is taking its toll on both the US and UK economies, but much like an old VHS tape which has been temporarily paused, things will pick up again. We are already seeing some green shoots of recovery in China, as factories, offices and shops reopen – we would hope other economies should follow in due course. “The stimulus package introduced in the US will provide remedial support for businesses and similarly, the UK government’s package of funding, which must be applauded for its speed of deployment, is already helping businesses at this challenging time. “It is important to recognise that prior to the current situation, both the US and UK markets were in good health, with combined trade worth £221bn. "Wall Street was celebrating record highs just a few months ago and the promise of a UK-US trade deal is around the corner, while these stimulus packages will tide over SMEs on both sides of the Atlantic in the meantime.” Cont.  39

FEATURE

US ECONOMY

Further analysis Alpesh Patel, CEO of Praefinium Partners and a former Visiting Fellow in Business, Oxford University – gives his analysis of the current US economic situation.

THE US/UK MARKET CRISIS: SHORT SHARP SHOCK? Where we are As I write, the US and UK Governments are making available trillions of dollars to businesses and individuals. Sadly, the tap is open but the pipe to deliver the money may be broken. SMEs are complaining they are not getting the money they need from banks. My fear is telling banks they must lend isn’t going to work – the bankers are well aware, when the dust settles, they will be under fire for making bad loans and fired for the same. Let me turn from the economy to the financial markets and the largest companies in the UK and US, which we can use as a barometer where we have more data than we do for private businesses. Why it may be short term According to Goldman Sachs, the average decline for an event-driven market decline is 30% and the duration is about nine months. Of course, since the COVID-19 crisis, from peak to trough, it has been much sooner. The average time to recover they say, based on an analysis of bear markets since 1900, is about 18 months. Could we have the much desired ‘V’ shape recovery? Bear markets tend not to be 'V' but 'W'. They can rise, as we have done into technical bull territory, before the second leg drops below the first. For the US markets that could mean a fall to below 18,000 (15% more) and for the FTSE 100 to under 4,000 (more than 20% lower than levels as I write). 40

Let us recall the financial crisis, which saw the US markets fall 54% from their peak and they took 48 months to recover from the bottom. And then there is oil The oil war between Russia and Iran is really about America. The desire to flush out the American shale market for one thing by the Russians. The economic damage to that industry and the companies around it will add to US economic problems. As for the benefits of cheaper fuel and energy costs – for consumers losing their jobs countrywide, the positive benefits are marginal. Add to all of this, the economic problems in the Middle East, with the blockade of Qatar by UAE and Saudi Arabia, and you see why OPEC itself is a weakened force and Russia’s alliance with it is something the latter felt it could disregard. We see in the West why actually a stronger OPEC would be beneficial. If the Middle East cannot unite over this – there really is no hope. The upside There may be inward UK investment – sort of. We should not be surprised with USD/

GBP also having taken a hit, partly for the level of UK spending to GDP, but also a stronger safe haven US dollar, to see FTSE 100 companies, debt-ladened in some cases, looking even cheaper in US prices – to face a slew of takeover bids - maybe from China, where the Shanghai index is not even down 10% this year. Take those companies with low Altman Scores (a measure of working capital and likelihood of bankruptcy) – Carnival (-75%), IAG (-65%), Melrose (-61%) – and that’s in GBP terms; even cheaper if you’re a dollar buyer. Of course, for private investors there is the simple arithmetic that should a company return to where it was three months ago, and it’s dropped 90%, then they make a 10-fold return on their money. Great, even if that three month fall takes a decade to recoup, let alone a year. Of course, some such companies will not survive despite immense government grants and loans. There is also the positive news that some companies are actually doing well, as a measure of their share prices – Polymetal, Pennon, Fresnillo, Hikma all up in the UK and in the US – Citrix, Netflix, Gilead are all up 15% in the past three months.  May - June 2020

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ALTHOUGH THESE ARE DIFFICULT TIMES FOR MANY, IT HAS BEEN TRULY INSPIRING TO SEE EXAMPLES OF BUSINESSES FINDING INNOVATIVE WAYS TO SUPPORT THE NATIONAL EFFORT IN A TIME OF CRISIS.

May - June 2020

ADVERTORIAL

Supporting SMEs through the COVID-19 crisis Tim Boag, Group Managing Director of Business Finance, Aldermore

he COVID-19 pandemic is creating unprecedented challenges in our society and local economies. It’s a worrying time for individuals, families and businesses. Everyone is having to adapt to the new conditions and assess the implications for the future. For small and medium-sized businesses (SMEs), some of these challenges are acute. Many SMEs operate on narrow margins and interruption to revenue can pose a real threat to their futures. How to keep paying staff, how to keep some income coming in, whether there are possibilities to adapt the business and create new services in light of COVID-19 – these are all critical questions. At Aldermore, we stand ready to help and support our SME customers. Within Business Finance, we provide a wide range of support, whether that is to finance an asset, unlock cash tied up in invoices, bridge a finance gap, invest in commercial property or obtain finance for property development. We are also active on the personal front, supporting investors and homebuyers with mortgages and savings products. Our focus is to continue to do everything we can to support the UK SME economy through this uniquely challenging period. Our customers are seeking guidance and advice on funding and finance, and how they can access what is right for their business. Unsurprisingly, our Business Finance teams have seen a massive increase in customer contact over the last few weeks, with a surge in requests for forbearance. Through the dedication and hard work of colleagues across our organisation, we have been delighted to help, within just a few weeks we have

supported many thousands of SME customers. If you are concerned about cash flow, my advice to any SME would be to speak to the finance providers you do business with and discuss your situation. As an industry, we want to help our customers through this difficult time and any responsible lender should be prepared to offer some forbearance measures for businesses affected by COVID-19. There is also a whole range of government-backed initiatives that have been announced, so another crucial step is to examine those very carefully and see what may be applicable to your business. To help customers, we have created a summary of all the key measures announced so far and put them into one document – the Aldermore Government Business Support Guide - which can be accessed online. One of the key measures announced is the Coronavirus Business Interruption Loan Scheme (CBILS), which is backed by the Government-owned British Business Bank and delivered through 40 accredited finance providers. Aldermore is delighted to be an accredited lender in the Asset Finance variant of the CBILS. We offer advances of between £50,000 and £250,000, with no fees and with an option to take up the Business Interruption Payment where the first 12 months’ interest payments are covered by the government. We are also looking to go further with the CBILS and deploy it across Invoice Finance. In addition, we have expedited changes in our ways of working to better support customers during this time. In Asset Finance, we have revised processes and fast-tracked the launch of our portal Asset

Backer to all our intermediaries. The new portal offers a paperless end-toend process, with electronic proposals, documents and signatures, enabling intermediaries to continue business with their customers at a distance. With our Invoice Finance products, we have created a tailored forbearance policy, which recognises customers’ changing circumstances and releases much needed additional cash. In addition, we have carried out an extensive review of our customer fee structures to ensure these reflect the challenges many are facing in generating sales and collecting payments from their customers. Although these are difficult times for many, it has been truly inspiring to see examples of businesses finding innovative ways to support the national effort in a time of crisis. For example, one of our Invoice Finance clients Didsbury Gin halted production and started making hand sanitiser on a mass scale for the Greater Manchester Police and the NHS. Another Invoice Finance client Mauveworx, a family-run marketing materials manufacturer based in Dorset, recently mobilised their resources to produce urgently needed PPE, to support the NHS in their fight against COVID-19. These stories epitomise the entrepreneurial spirit and innovative thinking that we are proud to champion at Aldermore. We are passionate about supporting our clients, providing them with additional funding to diversify into new areas or simply reach the other side of the crisis. Information about how we can help can be found on our website. Help and support is out there for your business – we can and will get through this together.

For more information: www.aldermore.co.uk/businessfinance or talk to one of our experts today: 0330 057 5685 Subject to status. Security may be required. Any property or asset used as security may be at risk if you do not repay any debt secured on it.

Business Leader - Inspire • Inform • Connect

SECTOR REPORT

‘WE ARE NOW LIVING IN A DIFFERENT WORLD’

WHAT NEXT FOR THE M&A SECTOR?

he relentless progress of the coronavirus is pummelling life and business in the UK in a way that hasn’t been seen since World War Two. The health of the nation has been shifted to the center of importance, with UK businesses effectively put in lockdown to tackle the spread and save lives.

To find out how different sectors are being impacted and reacting to the spread of the disease, BLM is talking with sector leaders across retail, construction, tech and others. For this article, we look at how mergers and acquisitions (M&A) activity is currently being affected. The Panel Rob Crews - Partner Momentum Corporate Finance Andrew Hodgson - Senior Partner KPMG Jonathan Jay - CEO The Dealmaker Academy

HOW IS THE COVID-19 CRISIS AFFECTING M&A ACTIVITY? Rob Crews: "M&A activity has been significantly impacted by COVID-19, with the crisis causing economic uncertainty, restricting the availability of cash, and creating logistical difficulties. All three of these factors are causing deals to fall over or go on pause. "But the principal 'deal killer' is uncertainty. Without being able to take a reasonable view of the future, it is difficult for purchasers to arrive at a deal value and therefore move forward. "The uncertainty is not just affecting the target of the transaction – the purchasers themselves are often unsure of their own futures." Andrew Hodgson: "As expected, we saw a bounce in M&A activity at the start of the year, as management teams became more confident, buoyed by the resolution of the General Election and as greater clarity emerged over Brexit. "Little did we know just how short lived this would be. We are now operating in a very different world. As disruption reached into all parts of the economy, deal activity well and truly hit the buffers with a thump."

May - June 2020

M&A

WHAT ARE THE M&A OPPORTUNITIES DURING THIS PERIOD? Rob Crews: "Whilst it is difficult to proceed with a transaction, it is not impossible. Specifically, where a business is being bought for its long-term growth, has a fundamentally strong business model, and is not in a sector directly impacted by COVID-19, then we are still seeing transactions progress. "Sectors in which we are still seeing deal activity include defence, cyber security, technology (both hardware and software), as well as food and drink manufacture. "Sectors which have been particularly badly impacted include leisure, travel, hospitality and (to the extent not online) retail." Andrew Hodgson: "Some deals are still

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moving and there are pockets of activity in selected sectors, but this is at significantly reduced levels. The current crisis has accelerated the trend towards these sectors, many of which are underpinning the economy right now, such as healthcare, logistics, renewable energy, online retail, financial services, insurance and IT. "While we saw interest in these areas long before we knew what the terms ‘furlough’ and ‘viral load’ meant, there’s a new agility in the economy and a stark difference has emerged between those businesses that are saleable at a strong multiple and those that are not. "Beyond these ‘hot sectors’, it is likely that distressed M&A will take the limelight over the coming months, as working capital problems force sellers to entertain investors

bearing rescue packages in return for equity. "It is likely that as companies are weaned off the considerable aid provided by the government – particularly the Jobs Retention Scheme – we will see an uptick in businesses in distress. Many businesses will not be able to fund the ramp-up in working capital needed to re-start their business." Jonathan Jay: "A downturn should not prevent you from expanding by buying another business - or three. Even when there is a lack of available finance, it is possible to structure deals so that no debt is required and, in many cases, the buyer doesn’t have to use personal capital either. Cont. 

SECTOR REPORT

M&A

"This is especially appealing to the business owner who wants to buy a business to add and additional income stream, or to expand into another territory. "Buying a business without risking your own cash may appear to be a pipe dream, but those deals are out there if you know where to look. "The key is to look for business owners who want to sell, rather than businesses which are for sale. There is a subtle difference. I rarely speak to business brokers, preferring to deal directly with the owners themselves." WHAT ABOUT THE ROLE OF PRIVATE EQUITY FIRMS IN FUNDING M&A DEALS? Rob Crews: "Private equity firms are still keen to invest but are taking a very cautious approach due to the economic uncertainty and often a need to deploy more cash into their existing portfolio of investments. "In addition, private equity access to bank funding for new deals is also severely restricted, as the banks focus on supporting their existing customers and deploying capital under the various government support schemes."

Rob Crews

Andrew Hodgson

"In addition, the availability of cash funding should improve – this crisis is different to 2008 in that the banking system is fundamentally robust and will hopefully pay a key part in the post-COVID-19 recovery.

"Governments have taken swift and decisive action to ensure temporary economic damage does not turn into permanent scarring. This WHILST M&A bodes well for the recovery. A modest increase in ACTIVITY IS CLEARLY government debt to GDP % REDUCED AT PRESENT, WE SEE THE POTENTIAL is a price well worth paying to avoid a vicious circle of FOR A SURGE IN DEALS company failures, rising IN THE SECOND HALF OF unemployment and zero or 2020. ASSUMING THAT negative growth.

Andrew Hodgson: "Where there is a good underlying business and a realistic story of turnaround, then banks will lend. When this becomes an equity risk however, then I don’t expect banks to lend. It’s at this point that shareholders will need to turn to equity investors COVID-19 IS BROUGHT "The big question remains as or sell their business at a UNDER CONTROL. to how sharp the recession distressed point in the cycle Rob Crews will actually be and crucially – not a palatable proposition how quickly the world will for most business owners. A bounce back – particularly the USA and parallel in the public markets might be an China. If these power houses of the global uptick in ‘public to private’ deals, as buyout economy can get moving quickly then the houses and well-resourced corporates prospects for deal activity in the second capitalise on depressed share prices." half of 2020 are good." WHAT ARE THE LONG-TERM OPPORTUNITIES WHEN IT COMES TO WHAT ADVICE WOULD YOU GIVE TO M&A? BUSINESS LEADER’S DURING THIS CRISIS? Rob Crews: "Whilst M&A activity is clearly reduced at present, we see the potential for Andrew Hodgson: "From a corporate a surge in deals in the second half of 2020. strategy perspective, it is best to think of Assuming that COVID-19 is brought under the journey through the COVID-19 crisis in control, then there will be opportunities for four phases – and, helpfully, four (almost) purchasers to pick up assets at attractive Rs: Reaction, Resilience, Recovery and New prices, following the current turmoil. Reality. 46

Jonathan Jay

"The Reaction stage is something that we’ve all been going through, where organisations had to make tough, rapid decisions to protect their staff and business. They deferred paying their tax, rent, rates, suppliers, and staff. This behaviour can’t go on for long though. "Next, we’ve seen the Resilience stage as companies settle into support schemes and progress from initial conversations with lenders, advisers, HMRC and other stakeholders to agree compromises that buy the business enough time to plan and recover. "Only then can management teams indulge in considering how to create a business for the future. This Recovery phase should see leaders make positive steps towards that vision. That means preparing for how their sector will change and what it will demand of them. This is also when forecasting, and prudence, are critical. "All this leads to the final stage; the New Reality. Many sectors will have gone through extreme changes and businesses need to be fit for the new reality, not the one that existed pre-crisis. "The winners will be those that embrace change – whatever it might look like. They’ll likely be the ones to drive a new wave of consolidation and investment, getting the M&A market back up and running. How long this will take remains to be seen, but best case is mid-2021. Worst case, it could be 2023 before the M&A markets return to its own New Reality."  May - June 2020

COMMENT

MENTAL HEALTH

SIMON BLAKE: HOW CAN BUSINESS LEADERS PROTECT THEIR OWN

WELLBEING DURING CRISES?

Simon Blake, Chief Executive at Mental Health First Aid (MHFA) England said: “This is a particularly difficult time for many business leaders as they manage the survival of their organisation. With over nine million employees expected to be furloughed, many leaders will find themselves making tough decisions, which some won’t have had to make before. "Over half of British people are experiencing ‘high levels’ of anxiety and CEOs and leaders aren’t exempt. It is normal for everyone to feel overwhelmed and stressed at this time – we are all human. Business leaders will be feeling the added responsibilities of ensuring support measures are in place for their employees, and leading by example. "My advice to fellow leaders would be to make sure you are honest with yourself, be realistic, and to seek support if you need

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it. Having a supportive workplace culture around wellbeing starts from the top; when we’re honest about our mental health, it enables all employees to do the same, and empowers them to feel they can reach out and seek the support they need. "Tracking how you’re feeling is a good start. It can allow you to implement positive coping strategies before anything deteriorates. You could try a weekly wellbeing check-up, where you can pause to consider how you are feeling mentally and physically, your sleep levels and your diet, or a ‘Stress Container' exercise, which can help you understand, address and reduce your stress levels. "There are also some small, practical steps you can take that could make a big difference. Many CEOs and leaders may find it increasingly difficult to separate work time and family time. Simple things like setting up a workplace separate from your sleeping

area can help you prepare for work mode and help you switch off at the end of the day. "A continual stream of video calls and meetings, as important as they are for business, is not sustainable. Take time to disconnect, pause, and decompress between calls – you can allow time for this by making meetings 25 or 50 minutes. "At MHFA England we have released a number of resources, including advice on supporting your mental health while working from home. "Remember, if you’re finding stress levels unmanageable, consider the support measures available to you. This might be speaking to a Mental Health First Aider, an EAP, or just a supportive colleague. MHFA England co-developed the free, NHSendorsed Every Mind Matters app, and the Samaritans and Shout support services are always available.” 

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ynergy Car Leasing is offering advice and guidance to business and personal vehicle leasing users, helping them to stay mobile and manage their current lease vehicles during COVID-19 and beyond.

Established in 2006 by CEO Paul Parkinson, Synergy has become one of the UK’s leading vehicle leasing brokers, focusing on consistently delivering an excellent customer experience in a complicated supply chain with multiple stakeholders. Parkinson explains: “Our reputation for best-in-class customer experience is the benchmark, and we recognise the bar is constantly moving higher. We don’t take anything for granted, and we know adding quality and value every day for our clients is the 21st century minimum. “Receiving the inaugural Feefo Platinum Service Award in 2020, for consistently achieving the highest customer feedback ratings over three consecutive years, is a fantastic recognition of our team’s work.”

Supplying all makes and models of cars and vans to clients nationwide, Synergy Car Leasing offers business and personal leasing and contract hire to all types of businesses as well as private individuals. Synergy’s team of Account Managers are trained to the highest industry standard to help clients find the right solutions. Leasing often represents excellent value for both businesses and individuals alike, with expert advice, a hassle-free easy online order and application process as well as bespoke quotations. Synergy also offers free UK mainland delivery to the home or office, saving its clients time and money. Parkinson continues: “Our panel of carefully selected finance partners and long-standing supplier relationships, mean we’re able to spread risk and credit lines to support our clients. Coupled with big buying power allowing us to pass on substantial fleet discounts, while accessing individual terms for larger fleets. We have access to thousands of stock vehicles from major manufacturers, as well as the ability to place factory orders. “For business users, we offer an online

Fleet Management service, with no-cost Accident and Incident Management, repairing vehicles quickly to get them back on the road and minimising downtime to keep your business mobile. We’re finding more and more of our clients are now looking for a one-stop shop to help manage their own personal car as well as those of their business.” Parkinson continues: “Synergy understands that individuals and businesses want hassle-free easy options; many of our clients take advantage of service, maintenance and tyre packages or opt to take fully maintained and insured vehicles, as well as short-term lease and rental vehicles. “Our team is also fully trained in providing consultancy on the transition to hybrid and electric vehicles. These are a great option to not only help the environment, but also reduce benefit-in-kind tax payable by the drivers. We’ve partnered with one of the UK’s leading electric vehicle charging installers for both commercial and domestic use, ensuring we offer complete support from end-to-end.”

For a no-obligation quotation or a free review of your current fleet or leasing arrangements, call Synergy’s friendly team on 0330 134 5998. Open seven days a week: Mon - Fri 8am - 8pm and Sat - Sun 10am – 8pm 48

WWW.SYNERGYCARLEASING.CO.UK

May - June 2020

WE CAN SUPPORT YOU EVERY STEP OF THE WAY At Wesleyan Bank we understand your need to work with a finance provider you can trust. Our dedicated team of account managers can support you every step of the way to find a tailored finance solution to meet your commercial needs. This includes: ► Asset finance ► IT finance (hardware, software and services) ► Commercial mortgages* ► Cashflow such as Tax, VAT and return to business purposes Wesleyan Bank acts as a broker and a lender. *Your property maybe be repossessed if you do not keep up repayments on your loan. Call 0800 980 9348 (Mon to Fri, 8:30am-5:30pm) or email us at bankcommercialsales@wesleyan.co.uk #hereforyou The Financial Conduct Authority does not regulate commercial mortgages. Wesleyan Bank Ltd (Registered in England and Wales No.02839202) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No.165116). Registered office: PO Box 3420, Colmore Circus, Birmingham, B4 6AE. Tel: 0800 358 1122. www.wesleyanbank.co.uk. Calls may be recorded to help us provide, monitor and improve our services to you.

INTERVIEW

CREATING A

PARTNERSHIP

Business Leader recently spoke to Lord Mark Price â&#x20AC;&#x201C; founder of Engaging Works, former Minister for Trade and a previous Managing Director of Waitrose â&#x20AC;&#x201C; about how you can be an effective leader for your team during the current COVID-19 pandemic. Lord Price also talks about his career in the John Lewis Partnership and the keys to remote working. 50

May - June 2020

LORD MARK PRICE

CAN YOU GIVE ME AN OVERVIEW OF YOUR CAREER? I joined the John Lewis Partnership as a trainee in 1982, having just graduated from university. I worked my way up the John Lewis side of the business across the UK, to take a managerial role in Southampton. Following this, I moved up to Edinburgh to manage a big project for the firm in the late 1980s. I subsequently opened a series of chains in Bristol, Kingston, High Wycombe and Cheadle. I then moved to the Waitrose board to become the company’s first Marketing Director. I joined the full board in 2004/5, where I became Partnerships Development Director. A few years later – in 2007 – I started to run Waitrose just at the start of the financial crisis! I led the company for ten years. When I retired at the age of 55 from the Partnership, David Cameron asked me to join the Government as Minister for State for Trade and Investment. Then, when he stepped down post-Brexit, Theresa May re-appointed me as Minister for Trade and State Policy. After this, I established Engaging Works to help businesses and individuals to be happier and more efficient in the workplace. We help people find jobs that they will be happy in, so that they can develop their careers. CAN YOU TELL ME MORE ABOUT ENGAGING WORKS AND WHY YOU LAUNCHED THE BUSINESS? I spent more than three decades working for the John Lewis Partnership. The unique thing about the company is that the man that founded it more than 100 years ago, in the aftermath of the First World War, believed there must be a new way to do business. A more equitable and fair way. He decided the essence of the company would be that everyone loved to work for the company. Believing that people are happy in their work, they will be more committed to the role and less tempted to leave. This will lead to better service and will have a more sustainable and successful business as a result. I spent more than 30 years embracing what that meant in practical terms – promoting a customer and employee-centric approach as a way of driving increased profitability.

Statistics show that businesses with increased employee engagement have higher profits and much lower staff turnover.

There has been a trend over a decade in acceptance of this way of working – but this has now escalated to record levels.

Following this, I wrote a book on the subject – of how the Partnership’s ideology was ahead of its times, and how the strategy is grounded in certain principles; reward and recognition, paying people fairly, giving people the right information about all aspects of the company, empowering people, caring for wellbeing of employees, pride in what you do, and having a purpose in what you do.

People have moved towards working from home for several reasons. For one, office space has become a lot more expensive, so businesses have expressed that they would like to have a more flexible working approach. As a result, hotdesking and remote working have increased dramatically. It has been driven by cost, but most people, when surveyed, believe they are more productive when working from home. Our research shows that 63% prefer working from home and more than 80% want to have a flexible working package.

ENGAGING WORKS COLLABORATES WITH BUSINESSES ON RETENTION AND COMMUNICATION WITH STAFF. WE FIND THE BEST STAFF TO RECRUIT FOR THEM THROUGH OUR PLATFORM. OUR COMPANY NOW OFFERS COMPANIES SURVEYS TO HELP WITH REMOTE WORKING – CONSIDERING THE CURRENT CLIMATE WE ARE IN.

After finishing the book, I met a brilliant woman who owned a tech company. She had built a digital platform which helps businesses measure against that criteria, in order to see how happy people were in their current role. This was how Engaging Works was formed. It is about assessing workplace happiness and productivity and it also measures the happiest companies to work for, and we help people find jobs within those companies. WHAT CHANGES TO ATTITUDES TOWARDS REMOTE WORKING WERE YOU STARTING TO SEE PRE COVID-19? If you look at statistics from the mid-2000s till now, there has been more than a doubling in the number of people who are working from home. At the start of this year, 1.5 million people were working from home. However, due to COVID-19 – that number has soared.

The modern workforce wants to have the flexibility to work from home – and they believe that productivity is on the rise as a result. WHY HAS IT NOT BEEN AS COMMONLY USED UNTIL RECENTLY? The reason it has not taken off in all companies, until now, is that staff might not have been trusted to be productive if they worked from home. The situation we all find ourselves in now, is highlighting that people are able to work from home and can be trusted to get their work done and be efficient. WITH MANY BUSINESSES FORCED INTO HAVING STAFF REMOTE WORKING DURING THIS PERIOD – HOW CAN LEADERS BEST KEEP THEIR EMPLOYEES MOTIVATED? If you boil it down to what makes people happy at work, whether someone works from the office or their home, there are challenges that need to be overcome. Employees need to feel like they are being paid fairly. Employees are not incurring the same costs as they would be if they were going to the office every day. There is no travelling or eating out, for example. A lot of their happiness can be related to this, as they are saving money that they would otherwise be spending if they were in the office. However, recognition for good work is harder to give to someone who is remote working. It is easy in the office to say ‘well done’ – but when someone works from home, you need to make the effort to let them know that. Business leaders need to work a lot harder at recognising people for the work they do. Cont. 

Business Leader - Inspire • Inform • Connect

INTERVIEW Communication is key. You need to let groups and individuals know about everything that is going on that is relevant and appreciated by the employee. This builds and enforces trust. You rely on them to get the job done when you cannot see them. This also empowers them to own their role and drive forward. Engagement is also important when understanding employee wellbeing – as you will need to hear from them about their situation and if they need assistance. WHAT WOULD YOU SAY TO THE ARGUMENT ABOUT REMOTE WORKING – THAT IT’S ONLY GOOD FOR THOSE WHO HAVE A NICE HOME ENVIRONMENT AND IT COULD ACTUALLY PUSH MANY PEOPLE WHO LEAD MORE UNSTABLE LIVES AWAY FROM A WORKING ENVIRONMENT THAT THEY FIND POSITIVE? There are a lot of jobs that cannot be done from home – like a lot of retailers or people in the emergency services, for example. When you look at large office blocks, that is where you can see a change in the way people work. However, there should not be a focus on home working – but rather remote working.

LORD MARK PRICE Giving people the option to work from a coffee shop or library can create a positive working environment for them. Many employees have this option and it makes them happy in their role, therefore making them more productive. It also saves them coming into the office when they could just do the job from where they feel comfortable. WHAT WOULD BE YOUR THREE TAKEAWAYS THAT PEOPLE CAN USE TO MAKE WORKING REMOTELY A SUCCESS? There is still a need for humans to connect and be a part of a team – therefore, my first takeaway would be to ensure that you are effectively communicating to them.

Lastly is to demonstrate how you care and listen to your employees. Having an issue raised in an office can go up the chain of command – however, with everyone working remotely, this can be challenging, and employees will not be as confident that it is being dealt with. Communicate clearly to everyone what you are doing to help this situation. Being able to measure this can show that you are taking a vested interest in your staff. 

My second takeaway is how business leaders can replicate that human touch – replicating that pat on the back. In my previous roles, I made a simple list of all my senior and key staff, and I would tick their names off once I had spoken to them, to make sure that I had communicated to all of them over the course of the week. It was very difficult, but it makes you think how you stay in personal contact with your team. This is crucial to the welfare of your workforce, to demonstrate that you care for them and that you can provide what they need.

Auditel welcomes Wyse Solutions to its growing Network of Franchisees Auditel is pleased to announce that Wyse Solutions has joined its growing Network of Franchisees and bring an added dimension of experience with their skills in document management and printing and mailing. Auditel is a leading UK company advising in the field of Procurement Strategies, Cost Control and Supply Chain Management, identifying and delivering the best outcomes relating to all cost areas. As businesses come out of these incredibly testing times with the gradual lifting period following lockdown, Auditel can help organisations face the ‘new normal’ and accelerate their return to stability and ultimately commercial success. Alex Scott, Director of Wyse Solutions and senior consultant with Auditel said: “Since March this year, the shape and very core of most UK businesses have changed at a speed, and in ways no one in the world ever thought possible. "Why should your business just aspire to return to the way things were, if in fact things can be so much better in a new form of normal for you? Who says you cannot define what this new normal looks like?” "Auditel’s trusted professional consultants work with organisations to highlight a road map to steer through the new normal. 52

“We are a potential resource to help companies and organisation to find and implement cost control solutions if they cannot do it all themselves.” For further information, please contact: Alex Scott, Senior Consultant E: alex.scott@auditel.co.uk T: 07967 477286

www.auditel.co.uk May - June 2020

TAKE CONTROL OF YOUR SUPPLY CHAIN. RIGHT DOWN TO THE LAST DETAIL. Platinum Sage X3 Partner Northgate House, Bath 0122 561 4583 www.synergerp.com

REVIEW

CREATED IN A CRISIS

FIVE BUSINESSES CREATED DURING A RECESSION

ith the ongoing coronavirus pandemic causing untold devastation to the business world, economists have predicted we could be on the cusp of a recession – or even slip into a depression.

However, just because companies across the world are struggling to deal with this unpresented change to daily working life, there are some major global businesses that actually rose out of tough economic times. Here, Business Leader Magazine lists five of those household names, and their story.

In the months leading up to the last major financial crisis, between 2007-08, two Californian friends and entrepreneurs – Brian Chesky and Joe Gebbia – had the idea of renting out an air mattress in their San Francisco living room. At the end of that year, the world descended into an international recession – and the pair saw it as an opportunity to expand their business. Airbnb took over the short-term living market, as people were being outpriced by hotels and the leisure industry. In the aftermath of the recession, the firm received major VC funding and their international expansion began. Airbnb is now valued at around £31bn.

In the worst financial crisis in the history of the world – the 1929 Great Depression – brothers Walt and Roy Disney incorporated a production company that had previously

showcased a short-animated feature, Steamboat Willie – starring Mickie Mouse. During the depression, Walt Disney Productions created cartoons to bring happiness to those suffering from the economic crisis. One of those cartoons was Snow White and the Seven Dwarfs. It was a major success, making around £1.25m during the period. The company confirmed its place in the people’s lives as an outlet from the struggles they were facing.

A decade earlier, at the end of the 1970 recession, FedEx founder Fred Smith developed a concept of a fast and reliable door-to-door delivery service as part of a university project at Yale Business School. Although this recession was relatively less impactful and short-lived in comparison to many others of the last 100 years, Smith struggled to sell a new delivery concept to the industry – which put the business in doubt. However, he became a pioneer of the modern delivery sector through its tracking service and real time updates. The global powerhouse now has annual revenues of more than £55bn.

International Business Machines Corporation (IBM) is today known as a multinational tech giant that specialises in cloud computing and AI, as well as computer hardware and software.

However, it was created during the 1911 recession in New York, where it was known as Computing-Tabulating-Recording Company (CTR). The firm began selling commercial and business machines during the two-year economic downturn. The leading businesses within the industry saw double-digit declines, however, CTR took advantage of the turmoil and set itself apart from the competition as the industry leader. By the 1920s, the company had weathered the storm of financial recession and WW1 to become an American institution.

At the tail end of the last financial crisis, former Yahoo executives Jan Koum and Brian Acton created an encrypted messaging services that enabled people to send messages around the world for free in real-time. After the pair convinced five former Yahoo colleagues to invest £200,00 into the fledgling business, it was launched on iOS and became one of the systems most downloaded apps. It soared in popularity, first in the USA, and then across the globe – leaving all over forms of instant messaging playing catch up. In 2014, just over five years after being founded, it was sold to Facebook for a jaw-dropping £15.5bn. 

May - June 2020

ADVERTORIAL

HEADING BACK TO THE OFFICE? GO BACK SAFELY | CONFIDENTLY | RESPONSIBLY

How to return safely to a postlockdown workplace

e are currently in the midst of a COVID-19 enforced lockdown, which has impacted businesses across all sectors and industries in a plethora of ways. The way the workplace operates will change beyond recognition, and companies should be making changes in order to adapt to the new working world that is on the horizon. Business Leader and Interaction – Bathbased office design and fit-out specialist firm – partnered to create a guide to returning back to the workplace. Workplace assessment With health and safety the most pressing concern for employees returning to their place of work, business leaders will need to check that everything is in order. Before the return, business owners will need to conduct research on where it is possible to apply social distancing. This can be achieved by creating extra space and de-cluttering offices. Systems will also change for lunch routines, how restrooms will be used by a large workforce, how shift changes will work, and how communal spaces/meeting rooms will be kept clean. To make sure your staff are happy with your plan following an assessment – ask them! Your staff will value that you’ve checked with them, as they will often think of something that you may have missed. Deborah Wilder, Head of Workplace Research & Strategy, said: “This is about connecting people again and reassuring them that you have their best interests at heart. Involving your employees in the process will help them feel more comfortable about returning to the workplace and will promote a culture of trust and collaboration.”

Business Leader - Inspire • Inform • Connect

Introduction of new safety measures Whether it is the two metre social distancing rule, hand sanitisers, or restricting what time certain employees work – new measures will be introduced. Increased frequency of general cleaning will be needed, as well as the introduction of PPE for all employees who require it. Hayley Blacker, Director, said: “One way walking routes, perspex screens between desks and hands free foot operated door openers. These are just some of the design and furniture adaptations that we are installing for clients. Our workplace strategy team are also helping them think about policy, risk assessments and behavioural measures such as new protocols for meetings and for receiving post.” Phased return Regardless of government instructions, a structured and phased return for all employees will be needed. By slowly reintroducing workers in stages, the safety measures a business leader has created can be adapted and changed to fit the office better. Gary Duguid, Commercial Director, comments: “Our designers are working closely with clients on space planning for social distancing, signage and wayfinding, to allow people to come back to the office as soon as possible while ensuring safety is the top priority.” Are co-working spaces going to become more popular? With the emphasis rightly on safety, smaller co-working facilities will become more popular and readily available, for when it

is necessary for workers to collaborate in person. Dieter Wood, Managing Director, said: “We create co-working spaces across the UK for several providers, including Runway East, Clarendon and Ethical Property. While the initial effect of COVID-19 was alarming for them, they are seeing enquiries increase and expect the market to be bigger than ever due to large businesses rationalising their multi-office portfolios, as well as greater demand from SMEs.” What adaptations will be needed to your work space? As workplace research, design and build experts, Interaction’s team of psychologists, designers, furniture consultants and project managers can provide a full package to support your business in returning to the office. This includes planning, risk assessments, policy and communications, designing and delivering physical adaptations to ensure social distancing, hygiene and safety, as well as logistics and storage. Interaction then review any physical and behavioural initiatives on a regular basis and help you plan for the future, including your longer term workplace strategy.

LEADERSHIP

TOP 32

usiness Leader has brought together a list of 32 female entrepreneurs to look out for. Whether they are an established and successful businesswoman, disrupting their industry, or are set to burst onto the scene – these women are set to dominate the business community for years to come. The list is in no particular order.

CAMILLA AINSWORTH MYLKPLUS At just 22 year’s old, Ainsworth became the youngest ever finalist on BBC’s The Apprentice and the founder of MYLKPLUS – a disruptive firm that offers dairy-free, veganfriendly, nut-alternative drinks. Passionate about health and wellbeing, MYLKPLUS was created to fulfil a personal need, and now seeks to offer the product to a wider audience. Ainsworth is also a huge advocate for women in business and has conducted workshops to facilitate start-ups.

MELISSA SNOVER REM3DY GROUP Known in her industry as a 3D printing and food technology trendsetter, Snover is also the founder of Rem3dy Group, which pioneers personalised health solutions across nutrition and medicine – under the brands Nourished and Script. Nourished is the world’s first customised nutrition product, which uses patented 3D printing technology and a vegan formula to combine seven different active ingredients into one personalised nutritional gummy stack. Scripted is the first 3D printed personalised medicine dispensary brought to the pharmaceutical market. 56

May - June 2020

FEMALE LEADERS SABRINA STOCKER MY TENNIS EVENTS

Katie Thomas

Camilla Ainsworth

Stocker is the founder of My Tennis Events and former participant on The Apprentice. A former tennis coach and player, Stocker studied for her MBA at Edinburgh Business School, where she became the youngest person ever to graduate. Combining her sports and business knowledge, she started her own events company, running tennis tournaments for children. The business now runs over 400 tennis tournaments a year in partnership with David Lloyd, Virgin Active, Better and the LTA, creating a six-figure annual turnover.

LUCY CHAMBERLAIN C&C SEARCH

Claire Novorol

Seeking to offer an entirely fresh concept in support staff recruitment, C&C Search was created by Lucy Chamberlain and her brother, Ed. With a 20-year career tracking the industry’s leading recruitment companies, Lucy co-founded C&C to redefine and elevate client and candidates’ recruitment experience. Specialising in recruiting support staff and HR professionals into SMEs, she’s built a successful business.

KATIE THOMAS

Claire Novorol

BETH BOTHAM

KTM DESIGN

REJUVENATE KITS

Founded in 2015 in Bournemouth, alongside England international footballer Tyrone Mings, Thomas’ KTM Design is an interior design and architecture practice that produces high-quality, versatile design solutions for commercial and residential clients. Thomas is also an interior design tutor at Arts University Bournemouth and the South West Regional Director for the Society of British & International Design (SBID).

Botham’s firm was created as a result of her own cancer diagnosis at just 17 years old. When she was ill, there was a lack of guidance. The aim of the company is to support people dealing with the side effects of chemotherapy.

Sabrina Stocker

She said: “I didn’t know what I needed to equip me for my journey, and I didn’t know where to find these things. My loved ones didn’t know what to buy me.” Rejuvenate Kits are the ultimate gift, which is nourishing and beneficial after a diagnosis, during or after cancer treatment.

ANNE BODEN STARLING BANK The digital bank was founded by Boden in 2014, and has now opened 1.25 million customer accounts and holds more than £1.25bn in deposits. Starling Bank has forged a reputation for bringing quality products to market across business banking, travel money or overdraft facilities, that have won it several international banking awards.

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POPPY GUSTAFSSON DARKTRACE Gustafsson is the co-founder of Darktrace, which received £182.1m in funding according to Crunchbase. Under her leadership, Darktrace reached a £1.36bn valuation in under five years and was named one of Europe’s fastest growing companies. Gustafsson is also a qualified chartered accountant and previously served as the company’s CFO before becoming its co-CEO.

CLAIRE NOVOROL ADA HEALTH Novorol is the co-founder of Ada Health – a personal symptom checker and healthcare app, which recently received £54.7m in funding. Her career has been guided by her interest in developing creative solutions to tackle real-world problems. Throughout her career, Novorol has advised several health start-ups and is also the founder of Doctorpreneurs - a global community of over 10,000 medical professionals who share an interest in health entrepreneurship. Cont.  57

TOP 32

Faye Watts

Andrea Reynolds

KATE STOTT

CHARMAINE VINCENT

BEAUTY BOOKER

BALTIMORE CONSULTING

Established by the Scottish entrepreneur, Beauty Booker is a business building app to encourage customer bookings for hair, beauty and nail salons and spas across the country. Stott’s background is in purchasing and recruiting for the oil and gas sector, and later became the first female global marketing lead within the company.

With 20 year’s professional experience, coupled with senior recruitment expertise spanning across both the public and commercial sector, Vincent founded recruitment company Baltimore Consulting in early 2013. Since completing an MBO of the company in May 2018 and taking 100% ownership, she was awarded 'SME Director of the Year 2019' at both the South West and National IoD Awards.

JACKIE FAST REBEL PI Best known for being one of the most successful entrepreneurs to appear on The Apprentice, Fast previously founded agency Slingshot Sponsorship in 2010 from her bedroom of a rented flat, with only £2,000 and a laptop. She single-handedly built the business to a global powerhouse with offices in Singapore, Brazil, Oslo and London, servicing some of the world’s most high-profile brands. Fast has since launched an ice wine brand, REBEL Pi.

CATHERINE MORGAN

VICKY SAYNOR BETHNAL&BEC As parents to four children, aged 8-14, Chris and Vicky Saynor understood the need for adults to find rest, relaxation and fun when they have time off from the kids or work. Bethnal&Bec is adult only accommodation for anyone looking for a place to switch-off, sleep, enjoy long walks, leisurely lunches in fantastic authentic local pubs, plus rest and relaxation.

MERILEE KARR

THE MONEY PANEL

UNDERTHEDOORMAT

Winner of the Best New Business at the National Business Women's Awards, Morgan’s 'The Money Panel', offers financial coaching and planning for ‘busy women’. Her mission is to change the financial services industry to one that helps educate women to be in control of their money, to get financially resilient, start investing and feeling confident with money.

Karr is an entrepreneur and industry leader in the short-term accommodation sector, projected to be valued at £271m by 2025 in Europe. Founder and CEO of UnderTheDoormat and Chairperson of the UK Industry body, she works closely with government and regularly appears on the BBC and industry conferences in the UK and globally.

Ella McKendrick

TIA ROQAA ROCCABOX Capitalising on the emerging subscription box industry, Roccabox is a beauty members club that gives customers the chance to access, try and enjoy the latest, the hottest and the best beauty products available. Roccabox delivers to your door a surprise selection of beauty products, carefully selected by beauty insiders.

FAYE WATTS FUSE ACCOUNTANTS Watts is one of the founding partners at FUSE and specialises in tax planning and consultancy for businesses and individuals, as well as having extensive property knowledge. Though she has experience working across a broad spectrum of industries, she particularly enjoys working with clients in the creative sector and collaborates with an interesting mix of actors, musicians and fashionistas.

SAMANAH DURAN BEYOUROWN A leading fashion designer and entrepreneur within the retail sector, Duran founded streetwear brand, Critics Clothing, May - June 2020

FEMALE LEADERS Zoe Sugg

Kate Stott

Vicky Saynor (Right)

which she initially self-funded at 22. It has since received Series A, B and C funding and grown a cult following from celebrities such as Rita Ora and MNEK. Since then, Duran has launched BEYOUROWN – a digital news outlet that champions entrepreneurs with a mission.

ANDREA REYNOLDS SWOOP FUNDING Reynolds co-founded Swoop Funding, a technology platform that matches SMEs with the correct funding. Before launching Swoop, Reynolds started as an accountant with KPMG. Her career evolved with a focus on raising funds for small businesses. Reynolds is a non-executive director for Berkshire Hathaway European Insurance.

ZOE SUGG ZOELLA Sugg is a prominent YouTuber, vlogger, businesswoman and author. She is also known by her YouTube username 'Zoella' (also the name of her company). Founded in 2009, Zoella creates ‘highly addictive’ content on blogsites, Instagram, Twitter, Facebook and Pinterest pages relating to fashion, lifetyle, food and books.

Business Leader - Inspire • Inform • Connect

Holly Tucker MBE

HOLLY TUCKER MBE NOTONTHEHIGHSTREET Tucker is an entrepreneur, philanthropist, and UK Ambassador for Creative Small Businesses. Founder of Europe's biggest small business marketplace, Notonthehighstreet, and now Holly & Co, a hub for small businesses to gain advice and inspiration; Tucker has made small business her lifeblood.

SUSANNA LAWSON ONEFILE Trusted by over 700,000 users worldwide, OneFile – co-founded by Lawson – is the UK's leading learning and development software. Its learning platform brings training and assessment together – allowing users to track their entire learning journey, from initial enrolment to end-point assessment. From apprenticeship training to professional development, OneFile can be used for all types of vocational training.

ELLA MCKENDRICK NUTRIBUDDY Nutribuddy launched in 2016 after nearly two years of planning and now has ten

members of staff, one production facility, one distribution facility and has sold over one million shakes. Founder McKendrick was dissatisfied with every other 'grab and go' meal option and decided to create a genuinely healthy brand that focuses on helping people who don't have much time to eat. Nutribuddy sell a range of natural shakes and cereals, made using natural wholefood ingredients.

JOANNE SPENCER INFINITE YOU Led by Spencer, Infinite You works with organisations to deliver inspiring and empowering change management, strategic leadership, and people development programmes – which maximise potential and make sustainable improvements to individual, team and organisational performance. Since establishing Infinite You, Spencer and the team have developed a proven track record in embedding cultural change, organisational transformation and people development improvements within well-known organisations across the UK.

Cont.  59

TOP 32 MICHELLE OVENS MBE SMALL BUSINESS BRITAIN Small Business Britain is the UK’s leading advocate for small businesses, supporting all 5.8 million small businesses in the UK – no matter their location, their sector, or their ambition level. Through a series of annual reports, events and campaigns, Ovens’ firm looks to champion and project the voice of small businesses in the UK to foster increased small business confidence. Fern Snailham

NICOLA HARRIS GEORGE JAMES BRIDAL George James Bridal is a multi-award winning boutique located in the heart of Bedfordshire. Harris’ family suffered a devastating tragedy which has been part of the driving force behind George James Bridal. Harris sadly lost her 10 year old nephew after he battled with cancer and this loss put things into perspective for her.

Alice Bentinck MBE

Sarah Haran

HEATHER BAKER

SARAH HARAN

BAKER THOMPSON ASSOCIATION

SARAH LUXURY HANDBAGS

BTA specialise in providing and teaching relevant skills and personal development for PAs and administrators. Their clients include banks and financial institutions, Premier League football clubs, universities, architects, the energy sector and media companies around the world. After over 20 years in the industry, Baker pioneered the training of PAs and administrators to ensure the success of their organisations and develop their own careers.

Haran’s fashion brand started out as a hobby. She taught herself how to make handbags, which soon developed into a full-time career.

FERN SNAILHAM UNEEK STAFFING As well as being a freelance public speaker and model, Fern Snailham is providing premium promotional and event staffing solutions UK wide through her firm UNEEK Staffing. The award-winning company supplies hand-picked experienced promotional staff for a variety of client events and field marketing campaigns. UNEEK staff allow customers to interact and engage with brands, products, and services, creating positive, memorable experiences.

Previously the Chief Operating Officer of iomart, an AIM-listed cloud computing business, Haran was frequently flying all over the country and needed a stylish bag for business, travel, and personal time. It has since grown into an internationallyacclaimed company.

Having worked in a bridal boutique, whilst ‘resting’ from her acting career, she thought to herself ‘I could do that’ and George James Bridal was born.

SUSIE MA TROPIC SKINCARE This British-Australian skincare entrepreneur is best known for her appearances on the seventh season of The Apprentice, in 2011, where, despite coming in third, she secured investment from Lord Sugar. Ma is the founder of Tropic Skincare, a natural, vegan and cruelty-free skincare brand, and has empowered over 12,000 women across the UK to start their own beauty business through her social selling initiative.

ALICE BENTINCK MBE

RONI SAVAGE

ENTREPRENEUR FIRST

JOMAS ASSOCIATES

Bentinck co-founded Entrepreneur First in 2011, which funds individuals and helps build teams, develop ideas, and accelerate through fundraising from the world's best investors.

Savage is the founder of construction business Jomas Associates – an innovative company of environmental and engineering specialists, providing a superior, responsive service through its highly technical staff and associates. Founded in 2009, the firm undertakes site investigations, land contamination risk assessments and geotechnical engineering assessments, adopting a pragmatic approach always.

To date, it has helped over 1200 individuals build more than 200 companies in Europe and Asia, with a total valuation of over £1.3bn. Bentinck also set up Code First: Girls – a not-for-profit that has taught 5,000 women to code for free while at university. 

May - June 2020

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INTERVIEW

CEO IN FOCUS:

IAN SMITH Ian Smith is the CEO of 1pm plc, an independent provider of finance facilities to the SME sector. Today, he offers BLM an insight into his company, his leadership style, and why he calls himself ‘the imposter in the room'.

CAN YOU TELL US ABOUT 1PM AND WHAT IT DOES? The 1pm name is derived from ‘one payment monthly’, which is the clue that we’re a money lender. 1pm is a non-bank, speciality finance provider focused on lending to SMEs in the UK, and, in particular, to smaller businesses – so the ‘S’ in SME. We’re a hybrid lender and broker, so taking lending risk on our own balance sheet, but also arranging finance from other lenders. We’re deliberately multi-product, providing all the main finance products SMEs require, namely asset, loan, vehicle and invoice finance – this range of products sets us apart. 62

We are currently lending circa £140m, generating circa £30m turnover, 80% of which is interest income from lending and 20% is commission income from broking. We have six UK sites and employ 190 people. We’re proud to be providing finance to the SME sector in the UK – the engine room of the UK economy – and filling the finance gap where traditional high street banks don’t now operate as they used to. WHY IS THERE A GAP AND WHY DON’T THE TRADITIONAL BANKS SERVE SMALLER SMES? Traditional banks are increasingly moving to automated systems, larger deals, vanilla terms, so not geared up for ‘story deals’ or

for high-volume smaller, potentially unusual deals or more complex situations. We have real people doing the underwriting and taking credit decisions, which means we offer a traditional service; speaking with customers, visiting borrowers, working with them to structure deals. Larger banks are very happy to lend to us to lend on to SMEs. We have nearly £200m of bank facilities ourselves, so very well-funded with operational debt – which is vital since cash is our raw material. TELL US ABOUT THE JOURNEY – HOW DID 1PM DEVELOP? The 1pm group is the product of a five-year buy-and-build strategy to establish a multiMay - June 2020

CEO IN FOCUS

"FOR ME, THERE ARE ONLY TWO IMPORTANT THINGS IN BUSINESS; HAVING THE RIGHT STRATEGY AND IMPLEMENTING IT WELL. EVERYTHING ELSE FLOWS FROM THAT."

HOW DID YOU BECOME INVOLVED WITH 1PM? With experience in working with smaller, listed entities, I was asked to take on the role of Non-Executive Chairman initially and I immediately saw an opportunity to expand the business and the need to mitigate inherent risk. Having identified and executed the first acquisition, my fellow non-executives asked me to step into the CEO role to take the business forward. I describe myself as a 'deal-doer' and have spent my career helping businesses transition from one stage of development to the next, and have seen all stages of the business cycle from start-up, scale-up to flotation and exit. For me, there are only two important things in business; having the right strategy and implementing it well. Everything else flows from that. I regard myself as a strategy implementation practitioner, so designing and implementing an expansion and scaleup strategy and leading its delivery was an ideal fit. My experience of the financial services sector is just the six years I have been with 1pm. When with bankers and finance people, I describe myself as ‘the imposter in the room’, but that gives me licence to ask the basic questions and expect a straightforward answer, which has many advantages. HOW HAVE YOU FOUND BEING A CEO IN AN UNFAMILIAR SECTOR? Adopting a straightforward methodology for implementing a strategy effectively is applicable to any sector, so it’s been a similar journey to the other sectors (mostly technology-related) in which I have worked.

product, risk-mitigated alternative finance platform. The original company relied entirely on broker-introduced deals and was engaged in quite high-risk lending. There was a need to diversify, in terms of lending product, introducer channel, asset categories funded, and debt facility providers used – in short, there needed to be much more spread in everything we do to reduce down-side risk and that is what we have achieved. 1pm is quoted on the AIM market of the London Stock Exchange, and has been since 2006, so has been able to raise equity funds for acquisitions – we have completed eight in five years – and enjoy a stable and supportive base of institutional and private shareholders. Business Leader - Inspire • Inform • Connect

But there are differences – I have found the absence of any real appetite for meaningful collaboration between companies in the sector frustrating; collaboration in technology sectors such as biotech, medtech and hitech engineering is commonplace and often a cornerstone of commercial success. Leasing and invoice finance are great industries to be part of, but working together to modernise and innovate is not a key feature. What I do know from working in different sectors with growth businesses, is you do need fellow executives around you who are steeped in the industry and I have been able to assemble a first-rate senior management

team at 1pm who ensure we deliver on our plans and promises. WHAT’S IMPORTANT TO YOU AND WHAT SHAPES YOUR BRAND OF LEADERSHIP? We’re not only a listed entity, but also FCA-regulated, so we have corporate governance and financial conduct standards to uphold. We’re also a commercial lender and need to be agile, entrepreneurial and innovative, never more so than when in crisis management phases such as dealing with impact on businesses of the COVID-19 pandemic. And we’re also growth-oriented in challenging business conditions. So, managing these sometimes-competing dynamics is a daily task. I like to lead through coalition, consensus and alignment. That requires three key things; a direction-defining purpose, a binding culture and a pool of talented people who identify with both. One of my favourite phrases is ‘the culture of an organisation is shaped by the worst behaviour its leader will tolerate’. That sounds like a table-thumping dictatorship – it’s actually quite the opposite, but it is about being clear what standards are expected and where the lines are drawn. Bringing through the next generation of leaders is also key. We have just launched a talent leadership programme for 11 selected 25 to 35-year-olds from around the 1pm group – I sometimes refer to them as the ‘junior board’ – who will deal with real business issues during the course of a year. It is incumbent on any leader, in my view, to identify and invest in the future CEOs. WHAT ARE YOUR AMBITIONS FOR THE NEXT FIVE YEARS? We have ambitious plans to grow the 1pm group, both organically and through further acquisitions. So, additional scale is key, but along with growth comes further change and evolution. As business lending increasingly follows consumer lending, in terms of customer expectations along an increasingly-digital journey, and with more onerous regulation, we need to be relevant and ready. In two years’ time we need to be bigger, more digitally capable and even more agile, without losing the traditional financial disciplines that have made us successful to date. And personally, with that achieved, my ambition is to hand over to the next CEO for the next phase of the 1pm journey. 

TECHNOLOGY FEATURE

THE FUTURE IS 5G: WHAT CAN BUSINESSES EXPECT?

rom David Icke inspired conspiracies to concerns from MPs about its implementation in relation to health concerns, the roll out of 5G in the UK has no doubt been contentious – but it is a potential game-changer for businesses.

To assess the impact it will have, Business Leader spoke to some of the country’s leading experts on the matter to find out how it can be transformational and why the UK is so far behind the rest of the world. What is it? And what is it replacing? 5G is the replacement for its predecessor – 4G – which was introduced in the UK in 2012. This revolutionised modern communication with faster connections, and the ability to use internet in more places and at higher speeds. The business world’s connectivity has made quantum leaps with each generation, as Kate Beaumont, Director Innovation, Technology & Services for Samsung UK – Mobile Division explains: “5G is redefining fast. With blazing speeds that are 10 times quicker than 4G, lower lag times, and much faster connections, there are a whole host of benefits for businesses.

“2G and 3G took us beyond just making calls, enabling us to send texts and even testing a little bit of the web on the move. Then 4G came along and altered the way we consume content on the go in seismic ways, as well as creating new businesses like Uber and Snapchat. All of which laid the foundation for the present leap into 5G.” But what will 5G change for businesses and different sectors? Russ Shaw from Global Tech Advocates comments: “The benefits of a 5G network extend beyond speed alone, offering increased capacity and ultra-low latency – delivering services in real-time, regardless of location. The jump between 3G to 4G was significant – it demonstrated the power of data and opened doors to a whole new world of technological opportunities. But the jump between 4G to 5G is generational – offering businesses improved connectivity at faster speeds, and the potential to transmit data with much less latency than 4G ever could. “Such change will provide a platform for various industries to innovate, including healthcare and automotive. For example, more advanced networks are the

foundation for technologies enabling surgeons to perform remote surgeries and for driverless cars to enter the mainstream.” It is these new innovations and introductions to market that will change industries. However, this will be done through an increased amount of smart devices and the latest developments from the Industrial Revolution 4.0 – the rapid adoption of new tech – which 5G will accelerate. John Vickery, Principal Technology Partner at BT Enterprise comments: “Simply said, 5G is widely believed to be smarter, faster and more efficient than 4G. It promises mobile data speeds that far outstrip the fastest home broadband network currently available to consumers. 5G also has a much lower latency, meaning consumers and businesses can download and upload files quickly and easily, without worrying about network delays or issues. For the business world, which is moving at a

May - June 2020

rapid pace with technology adoption, we need to provide our customers with 5G networking, ensuring they can benefit from emerging innovations, and ultimately transform their business.” And many of the UK’s major mobile service providers are preparing for 5G to change the business landscape. A spokesperson from Three said: “5G isn’t just another mobile upgrade; it’s a massive step forward in combining many advanced network and computing technologies, to create the platform on which the world’s digital economy will run. It will generate new jobs, products and services that will power future economies and societies. “We will see industries like manufacturing, agriculture, transport and healthcare, significantly evolve to be far more accurate and efficient. As 5G becomes more and more readily available, the opportunities it brings to a wide range of services will become even more exciting. “In the shorter term though, it will be a key enabler for a range of technical developments and capabilities – something businesses will particularly notice, is the ability for colleagues to work more remotely with more efficiency.” How will 5G change business? In this era, virtually every business is a digital business, which means 5G will arguably impact every facet of business life – from the way employees operate and communicate, to the way businesses cater to its own customers, and to the way entrepreneurs innovate. Vickery comments: “With a growing global workforce, a shift in media consumption and an increase in remote working, access to mobile and virtual technologies has become a necessity for many businesses.

Kate Beaumont Samsung UK, Mobile division

Russ Shaw Global Tech Advocates

"The biggest enabler of a mobile-first ecosystem will no doubt be 5G. Flexibility for employees to work anywhere, anytime is made possible with a mobile-first approach. For businesses, this will mean streaming high-resolution video, audio and images with practically no latency.

5G IS REDEFINING FAST. WITH BLAZING SPEEDS THAT ARE 10 TIMES QUICKER THAN 4G, LOWER LAG TIMES, AND MUCH FASTER CONNECTIONS, THERE ARE A WHOLE HOST OF BENEFITS FOR BUSINESSES. Kate Beaumont - Samsung UK, Mobile Division

“5G also has the potential to bring improved safety and productivity to workers in construction, manufacturing, transport and logistics. It can also deliver improved

John Vickery BT Enterprise

patient experiences and outcomes by moving diagnostic and clinical expertise closer to the patient. For the first time, 5G will enable high quality video, audio and diagnostic services to run in realtime to link field practitioners with remote expertise.” Has the coronavirus outbreak shown why it is needed? With businesses across the world reeling from the impact of the COVID-19 pandemic, hundreds of millions of people are now being forced to work from their homes during lockdown. With devices being spread across a wider area – and more internet being used for calls, video conferencing, etc – it has shown the need for 5G to make future work faster and more reliable. Shaw comments: “COVID-19 has ushered in an era of remote working, highlighting the importance of connectivity to our personal and professional lives. Increased usage has certainly put pressure on service providers to upgrade networks and monitor demands on the country’s bandwidth – perhaps the situation could have been be different with a nationwide 5G network.” Cont. 

Business Leader - Inspire • Inform • Connect

FEATURE

What challenges does it face? Away from the current pandemic, clearly there is a strong business case for wider implementation of 5G across the country, to improve companies in every sector. However, 5Gs widespread acceptance and integration into the business community has several challenges to overcome. Dr Paul Carter, CEO Global Wireless Solutions, summarises: “Investment, government involvement, and public relations are crucial if we are to see the widescale adoption of 5G across the UK. "Perhaps these are viewed as challenges, but hopefully they can be turned into opportunities to ensure that 5G can be deployed across the UK so businesses and consumers can take full advantage of the benefits available from this new generation of wireless technology. “Operators are obviously investing in spectrum and infrastructure; however, will availability of spectrum match the market needs? Do businesses understand the full potential of 5G and are they starting to invest in updated or new products and services to take advantage of the power of 5G? What more could the government do to spur investment and development of 5G networks and applications? “Lastly, with so much misinformation

swirling around 5G, the public at large needs help in separating fact from fiction and in understanding what 5G will bring to them and all within a safe environment. Whether it’s the operators, the government, consumer-facing experts, or all of the above, consumers need to hear more realistic messaging about 5G.”

“It’s unlikely that initial phases of a 5G rollout will make a dramatic impact on rural broadband. This has been shown in several countries, including our recent testing in South Korea. The excitement around 5G is justified, but 4G networks will be crucial to help expand coverage across rural areas.

With investment and the subsequent infrastructure in place, cities across the UK will be able to benefit from al that 5G can offer businesses. However, connectivity within rural business areas are currently being affected by poor connectivity. Can 5G change this? RootMetrics’ Chief Commercial Officer, Kevin Hasley, comments: “One challenge will be extending beyond urban areas into rural environments. 5G infrastructure involves a requirement for denser deployment of smaller equipment, which makes it more suited to urban, more populous areas from an ROI standpoint.

WITH A GROWING GLOBAL WORKFORCE, A SHIFT IN MEDIA CONSUMPTION AND AN INCREASE IN REMOTE WORKING, ACCESS TO MOBILE AND VIRTUAL TECHNOLOGIES HAS BECOME A NECESSITY FOR MANY BUSINESSES. John Vickery

“However, that does not mean that the rollout of 5G in Britain’s cities and towns will not have a positive impact on rural connectivity. Because 5G will ease capacity constraints on 4G networks in urban and suburban areas, this will make it easier to expand 4G more widely in rural areas.

May - June 2020

current context. The partial access granted should ensure that, at the very least, collaboration with Huawei is not disruptive to the rollout, while ensuring that we benefit from its technical expertise. “Excluding a company like Huawei from the UK’s digital future is to fundamentally remove it from the conversation on 5G in this country. This could cause profound harm to UK digital infrastructure, which should not ignore expertise from the worldleading Chinese tech sector.” Dr Paul Carter Global Wireless Solutions

Kevin Hasley RootMetrics

“As we move forward and 5G becomes the norm, operators will have the ability to re-farm the existing spectrum for new uses. In this type of 'trickle-down' scenario, 5G could ultimately help rural areas – not necessarily by expanding 5G service itself but by allowing the growth of additional 4G resources.” And much like the wider business community – whether urban or rural – the rapid development of industry has created a skills gap. This has affected 5Gs current state in the UK and could threaten its future implementation. Beaumont comments: “The adoption of 5G and deployment has been pushed at a greater speed than any recent network infrastructure, fuelled by international and national competition. This competition creates a huge need for skilled engineers and support teams to deploy network infrastructure. Plugging this skills gap is essential to secure the continued growth of 5G and future network technologies.” Are there any security risks? Perhaps the largest challenging factor immediately facing 5G in the UK is its supposed security concerns, which has hit the headlines in recent months. In January, Chinese tech giant Huawei was selected by the UK government to be used in its future 5G networks. US President Donald Trump's government warned the UK against using Huawei's 5G mobile networks and said the current plans are ‘nothing short of madness’.

Business Leader - Inspire • Inform • Connect

Mike Cherry Federation for Small Busineses

But is Huawei really a threat to national security? Is their involvement crucial to it being swiftly and correctly implemented across the UK? Shaw comments: “While security concerns over Huawei’s technology will likely linger, the government’s decision to allow the Chinese company partial access to the UK 5G network may well be critical to its successful rollout. The security concerns of the public and enterprise must always remain central with regard to advanced technologies, but the company’s involvement should catalyse implementation.

AS WE MOVE FORWARD AND 5G BECOMES THE NORM, OPERATORS WILL HAVE THE ABILITY TO RE-FARM THE EXISTING SPECTRUM FOR NEW USES. IN THIS TYPE OF 'TRICKLE-DOWN' SCENARIO, 5G COULD ULTIMATELY HELP RURAL AREA. John Vickery

“We know that China is a leader in 5G and having Huawei contribute to ‘noncore’ elements of the network could well prove crucial to our timely deployment, which is essential for Britain’s broader business community – particularly in the

Will we see more innovations as a result of 5G? With the security question set to rumble on until the government creates a clearer roadmap on its future implementation and impact on the economy, businesses will be focusing on what opportunities it could provide in the future after the current crisis. Federation for Small Business, National Chairman, Mike Cherry, comments: “The new 5G network will have a tremendous effect on the economy and could potentially revolutionise the way we do business.” Dr Carter believes innovators and disruptors will revel in all that 5G will have to offer. He said: “For innovators, 5G is a blank canvas, a new playing field. Activities, applications, equipment, products, and services that exist today are built, manufactured, designed, or offered around today’s network, in terms of speed, latency, capacity, reliability and coverage. "5G promises to change all of that. Significant improvements in all of those network areas will foster innovation, as commercial and public enterprises will be able to do or provide something that wasn’t possible before. “Today, the industry is discussing and even designing and preparing for innovative concepts that we feel confident can be rolled out on 5G networks at some point – autonomous cars, connected infrastructure and communities, AR and VR applications, remote robotic applications, IoT, and more. However, certainly we are only just scratching the surface of possibilities and opportunities. To put it another way; ‘we won’t know until we get there’.” 

DEBATE

GLOBAL #1 UNIVERSITY BUSINESS INCUBATOR HELPING GROWING COMPANIES ACCESS R&D FUNDING, INVESTMENT AND TALENT SCALEUP@SETSQUARED.CO.UK | SETSQUARED.CO.UK/PROGRAMME/SCALE-UP-PROGRAMME

HOW IS TECHNOLOGY IMPACTING THE WORLD OF TRANSACTIONS AND PAYMENTS? The panel Chris Pett – SETsquared Stephen Mayers – SETsquared Tom Fox – KPMG Martyn Walker – Active Ledger Sam Gamble – Automated Markets Paul Barker – Claritum Dr Tiejun Ma – Uni of Southampton Howard Allen – Healthbank Sean Hunter – OakNorth Ed Chapman – Ince Metcalfes Tom Bangay – Juro Julie Barry – Rift Rob Aitchison – Automated Markets Adam Walker – Active Ledger Lisa Preston – Amplify PR

YOU SEEING AROUND THE FUTURE OF TECHNOLOGY AND HOW IS THIS IMPACTING TRANSACTIONS AND PAYMENTS?

Financial technology (fintech) companies are finding new ways to automate the delivery and use of financial services to drive better consumer experiences. We have already seen the evolution of digital payment solutions, online credit approval and cryptocurrency. Add the potential of blockchain, quantum computing, AI and machine learning and we have a very different horizon for the financial sector.

“Collaboration is another big theme. Established companies are looking at how they can innovate without bringing everything inhouse – and this means working with smaller enterprises who are at the cutting edge of how to integrate everything together to improve the customer experience.”

he financial services industry is at a tipping point. Transactions that were once only possible through a visit in person to your local bank can now be completed with just a few taps on a mobile phone. And that is just the start of it. Disruptive technologies have found a way into this highly regulated industry and are transforming the way the financial sector operates.

Business Leader Magazine and SETsquared, the global number one business incubator and enterprise partnership, gathered together leading academics and entrepreneurs from a range of industries for a roundtable debate to discuss the trends, challenges and technologies shaping the world of transactions and payments. Tom Fox from KPMG works closely with businesses across the tech space to explore the potential of fintech for their global audit, tax and advisory services. He was asked: WHAT TRENDS ARE

“KPMG released a detailed report about the key trends and its overarching themes centred on the integrity of data, cybersecurity and regulation. One of the pressing questions regarding data is how to get international agreements in place, so you can ensure best practice to manage the speed of transactions across borders. Will the regulation do that, or will we see protectionism coming in?

OakNorth Bank is one the UK’s fastestgrowing challenger banks. It was recently confirmed as a ‘unicorn’ – which is a business that has a billion-dollar valuation attached to it. The bank is known for its pioneering approach to technology and its Chief Operating Officer Sean Hunter was next to talk during the debate. He was asked: HOW ARE YOU LEVERAGING TECHNOLOGY TO IMPROVE TRANSACTIONS AND THE CUSTOMER EXPERIENCE? “We’ve built a platform that uses data analytics and human expertise to do

May - June 2020

TECHNOLOGY

GLOBAL #1 UNIVERSITY BUSINESS INCUBATOR HELPING GROWING COMPANIES ACCESS R&D FUNDING, INVESTMENT AND TALENT SCALEUP@SETSQUARED.CO.UK | SETSQUARED.CO.UK/PROGRAMME/SCALE-UP-PROGRAMME

credit analysis and monitoring for SME and mid-cap lending. OakNorth Bank is based in the UK and we also license our technology to other financial firms outside of the country. The technology evaluates very complex lending scenarios and it allows us to reach a wider breadth of businesses with our funding options. We use ML (machine learning) models and data analysis but with humans in the loop to do the last piece of the puzzle, in order to make a good decision fast. “This lower-middle market is worth trillions of dollars globally, so it’s a large blind spot that banks have; they find this type of lending too difficult, but our technology makes it easy.” Sean also talked about how they are using technology to analyse lending risk. “With SME and mid-cap lending, there isn’t a lot of standardisation when it comes to data so it can be difficult to assess risk. Artificial intelligence (AI) and machine learning can help with being able to compare one company with another. “For example, if somebody comes to us with an idea for a vegan restaurant, past data won’t give an indicator of how successful this company could be in the future because it’s a new trend. To help with this, we use AI and machine learning to pull various financial data sets about the company from a myriad of sources and map it into something that is consistent, so you can make a fair judgement. “In addition, we pull in external data so we can understand what the trends are in the

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market, who is interested in vegan food, how is it performing and how might it be impacted in the future? “We use advanced data analytics to compare external data and internal data to make reasoned judgement. We also use AI to bring all that data together and create financial modelling and then we make the final decision the old-fashioned way by bringing in humans.” The debate then spoke to lawyer Ed Chapman, who works for the legal firm Ince Metcalfes, to see how technology advances are impacting his sector and improving transactions and payments. Cont. 

DEBATE

GLOBAL #1 UNIVERSITY BUSINESS INCUBATOR HELPING GROWING COMPANIES ACCESS R&D FUNDING, INVESTMENT AND TALENT SCALEUP@SETSQUARED.CO.UK | SETSQUARED.CO.UK/PROGRAMME/SCALE-UP-PROGRAMME

YOU SEE LOTS OF BUSINESSES IN THE TECHNOLOGY SPACE THAT THINK IT WILL BE EASY TO GET FUNDING BUT THAT OFTEN ISN’T THE CASE. OFTEN PEOPLE HAVE A GOOD IDEA, BUT THEY DON’T HAVE A BUSINESS YET. Julie Barry - Rift

“In the legal sector there is a big demand for increased responsiveness and new technology is allowing us to be much more efficient in how we manage legal transactions and payments for our clients. The challenge is mass adoption and making sure that firms are aligned with client expectations. But we’re seeing change, and technology is allowing us to create better experiences.” Tom Bangay works for Juro, a contract management software business, built on Ed’s comments and gave his views on: HOW TECHNOLOGY IS CHANGING CONTRACT MANAGEMENT. “The answer is slowly; Microsoft Word is still the dominant platform used for contract management. Getting people to do things differently is difficult and the demand for alternatives varies by sector. “One of our customers needed a contract to be signed by its CFO and he called us because he was trying to sign it with his finger on his laptop screen and it wasn’t a 70

touchscreen. This is an example of how it varies by sector just how willing – or able – people are to embrace new technology.”

documents in the post to be hand-signed, offering a digital alternative could create a better customer experience.”

FOLLOWING THIS, TOM WAS ASKED: WHEN DO YOU SEE A TIPPING POINT HAPPENING?

The debate then left the subject of contracts and the legal sector and moved to the construction industry, to talk to Sam Gamble, from Automated Markets – a business that is pioneering data collection work in the sector. He was asked: HOW TECHNOLOGY MIGHT IMPROVE PROCESSES IN THE CONSTRUCTION SECTOR?

“The real issue is finding out why some companies decide to try a challenger vendor like Juro for their contract management. It’s usually because they have a pain point and they want to remove it. Companies often switch to us because they manage a high volume of contracts and our platform simplifies the process. “Where we often see mass adoption is with high-growth businesses because they don’t have a legacy problem to unpick. For example, Deliveroo was one of our first customers because what they required was speed. “Another example is when the first point of customer contact for a business is a contract. Rather than send reams of

“We’re delivering a blockchain project that is capturing data to analyse goods, works and services on construction sites to find out where the value lies in how they operate. The focus here is not so much on the payment itself between suppliers but on the data, because in construction they generate lots of information but generally have nowhere to store it or a sensible way of retrieving it. “This sector is very process and pricedriven and there are lots of processes May - June 2020

TECHNOLOGY

GLOBAL #1 UNIVERSITY BUSINESS INCUBATOR HELPING GROWING COMPANIES ACCESS R&D FUNDING, INVESTMENT AND TALENT SCALEUP@SETSQUARED.CO.UK | SETSQUARED.CO.UK/PROGRAMME/SCALE-UP-PROGRAMME to store data, but they have no implementation of software and no way of sharing data. We’re looking to try and solve this problem and create more positive outcomes for the data that is generated.” The construction sector is one of the biggest in the UK, but it can often be slow to adopt new technology and processes, something which Sam and his team are on a mission to change.

OFTEN WITH TECHNOLOGY PRODUCTS IT’S ALL ABOUT BREAKING OUT OF THAT CIRCLE AND CREATING SOMETHING THAT IS EASY TO MONETISE AND IS USABLE.

The debate then talked about some of the general challenges that businesses in the tech and transaction space are facing. Funding, staffing and scaling the company are often the most common challenges and the group heard first from Paul Barker, founder and owner of Claritum – an automated e-procurement business. “Often the technology is well understood but it’s about attracting the required funding to bring them to market, which is a common challenge. We don’t have big venture capital behind us, and we’re bootstrapped as a business, so the biggest challenge is breaking out of the cycle of doing everything that your customer wants whilst also trying to scale the business. Often with technology products it’s all about breaking out of that circle and creating something that is easy to monetise and is usable. "Also, at what point in the business cycle do you decide to take the profits you have made from your original idea and invest it into something new. This is the tension that many technology leaders face, and it’s been the same for us.” On the theme of funding, Julie Barry, Head of Business Development at Rift, an R&D tax credit consultancy, said: “You see lots of businesses in the technology space that think it’ll be easy to get funding but that usually isn’t the case. Often people have a good idea, but they don’t have a business yet or they have funded a business by themselves and they need a million pounds now to take it to the next level. Business Leader - Inspire • Inform • Connect

“Having a good idea is no longer enough as there are so many good ideas, which means that many of them are unfortunately going to be disappointed. The key is to prove market fit and to demonstrate that people are going to use and ultimately pay for your product and service.”

WHAT ABOUT SERVING Paul Barker SPECIFIC SECTORS WITH FINANCIAL SERVICES? Howard Allen set up Healthbank to support people of all ages and their carers. “What’s important is enabling people to manage their own care and health. "The financial requirements of the health and social care sector is not specifically served, and I think it can be. Bank grade security is not good enough for vulnerable people and someone with arthritic fingers may not be able to use an app, so I see the potential of voice-activated platforms such as Amazon’s Alexa as being an alternative, possibly combined with text messaging and an app.”

models, which could substantially reduce operational costs for finance firms.” IN SUMMARY The financial industry is transforming and there are lots of new technologies coming in. Aside from the tech itself, there are also opportunities for understanding the human factors; confluence of data science and human psychology, and this is important when understanding data capture and use. Only 12% of financial services companies are mature in their digital transformation. This presents huge opportunity for digital disruptors to seize market share and offer consumers more convenient and faster ways to transact with each other. However, fintech start-ups are unlikely to wipe out traditional banks completely, but they are forcing the banking and financial services industry to reinvent themselves. Fintech companies can partner and collaborate with larger incumbents in the financial sector to provide the technologies that their customers want.

Sourcing funding and driving business growth can be a challenge. SETsquared can help fintech companies to scale-up and raise investment for their R&D. Stephen Mayers BY BRINGING SO MUCH FINANCIAL has over 30 years’ experience leading SERVICES ONLINE, HOW TO DO YOU effective teams and driving commercial scale MAKE IT SAFE? Dr Tiejun and he works for SETsquared: Ma, Associate Professor “We provide access to public THE FINANCIAL and private investment in Risk and Decision Analytics at the University REQUIREMENTS OF alongside the leading academic of Southampton, applies expertise of our six partner THE HEALTH AND AI to the banking sector. SOCIAL CARE SECTOR universities to help boost R&D He develops predictive and business growth. IS NOT SPECIFICALLY behaviour algorithms to analyse credit risk and SERVED, AND I THINK “Sometimes you have to work outside of your comfort zone to improve their accuracy to IT CAN BE. complete your technology and prevent online fraud. Dr Ma Howard Allen provide added value for your said: “One example of a huge users. We can put you in touch change that’s happened with academic experts or other start-ups over the past few years is using mobile in our business incubators, who you can phones to actually borrow money and collaborate with for that finishing touch. This make transactions. How can you prevent often is the key to unlocking the next phase fraudsters trying to use fake IDs to borrow of business growth.”  money? Well, risk assessment through the latest AI models plays an important role in trying to identify such malicious activities To find out more about SETsquared and through multi-dimensional behaviour its Scale-Up Programme visit analysis and smart risk assessment www.setsquared.co.uk

LATEST NEWS

UK biotech business secures £1.4m funding

Barclays warn that coronavirus could cost firm up to £2.1bn Barclays has warned that the ongoing coronavirus pandemic sweeping across the world could cost the bank up to £2.1bn. This sum is largely down to customers being unable to pay back loans. The news follows the announcement that Barclays’ profits have fallen to £923m in the first quarter of 2020 - down from £1.54bn in the same period last year.

A UK biotech start-up has secured a major investment boost in a deal which will help the firm rapidly accelerate its life changing work. MicrofluidX - which specialises in developing technology for cell and gene-therapy manufacturing - has raised £1.4m in seedfunding. The cash-injection comes despite the global COVID-19 pandemic which has seen many deals put on hold.

Barclays' CEO Jes Staley said: "We have taken a £2.1bn credit impairment charge which reflects our initial estimates of the impact of the COVID-19 pandemic. Given the uncertainty around the developing economic downturn and low interest rate environment, 2020 is expected to be challenging."

Sir James Dyson named the richest person in the UK for the first time Prolific entrepreneur and inventor Sir James Dyson has topped the Sunday Times Rich List for the first time.

Antoine Espinet, founder and CEO of MicrofluidX, comments: “We are thrilled to close this initial funding round. The funding will be used to further develop our technology, as well as fund trials with our partners.”

The deal was assisted by Harper James Solicitors who have worked with MicrofluidX for the past six months.

Dyson initially made his fortune with the invention of the bag-less vacuum cleaner and has since grown the brand into an international icon within the industry.

Sir James Dyson

The top five richest people in the UK are Sir James Dyson (£16.2bn), Sri and Gopi Hinduja (£16bn), David and Simon Reuben (£16bn), Sir Leonard Blavatnik (£15.8bn), and Sir Jim Ratcliffe (£12.2bn).

NHS set to benefit from £13.4bn debt write-off Over £13bn of NHS debt will be scrapped as part of a wider package of NHS reforms announced by the Health Secretary. The changes will provide much needed financial support during this unprecedented viral pandemic, as well as laying secure foundations for the longer-term commitments set out last year to support the NHS to become more financially sustainable. Health Secretary Matt Hancock said: "As we tackle this crisis, nobody in our health service should be distracted by their hospital’s past finances. Today’s £13.4bn debt write off will wipe the slate clean and allow NHS hospitals to plan for the future and invest in vital services.”

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