As we come out of the pandemic, established businesses are planning to grow, according to a recent survey conducted by First West Capital.
The informal survey asked business owners to tell us how their business has fared over the past 15 months, as well as their business outlook. While 69% of respondents reported the negative impact of the pandemic on their business, 45% of those reported that they were looking to either expand or acquire another business over the next 12 months.
This was particularly true for companies that have been in business for more than three years, have had the resources to grow digitally and have successfully expanded into new markets.
“The economic uncertainty of the pandemic in the early days caused a lot of business owners to hit pause on any major decisions regarding their business,” says Debby Fu, First West Capital’s Associate Director. “After over a year of living through the pandemic, while there is still uncertainty, many business owners have seen how their business has adapted or survived through the uncertainty, and are choosing to move on.”
Business as usual?
Many are anticipating a return to business practices similar to pre-COVID. In fact, only 13% of respondents reported their day-to-day operations have drastically changed. Digital transformation was a key learning for 38% of businesses, while half pivoted to new products and markets. Unsurprisingly, a majority of those who own larger businesses indicated that maintaining a “safe and healthy workplace” was a key takeaway.
“These results are not surprising as we saw similar actions with our own partners like Spin Society, who had to shift gears quickly during the pandemic from in-person classes to online classes and equipment rentals,” says Fu.
Among those who reported shifting to new markets and products, the average business age was 10.8 years old – ranging from 3-30 years in business and generally small to medium sized companies.
“The benefits of being a small-medium sized company in times of uncertainty is their ability to quickly pivot, operate with more agility, and implement changes,” comments Fu.
However, not all businesses have been as successful at pivoting to new products and markets. Even as a mature business, some were not able to access the tools required to make necessary changes during the pandemic. Our survey shows that 13% of respondents who have been in business between five and 10 years were anticipating closing their business in the next 12 months.
Although uncertainty still remains, and the pandemic has had a notably negative impact for the majority of businesses, our data shows that most businesses have recognized the need to adapt quickly to the new business landscape, and that challenges can sometimes present themselves as new opportunities for growth.