We are currently in the middle of an unprecedented state of events. No one quite knows what to expect, how long we will be in this unsettling period or what the future will entail. However, what is true is that all businesses have been jolted, which will probably have long-term consequences.
Borrowing and Loans
The government, quite rightly, has set out a range of packages to support public services, people and businesses during the coronavirus outbreak. Unavoidably, the package involves expending taxpayers’ money, and lots of it.
This funding is unavoidable to keep the economy and businesses functioning today, but as we are unsure what the numbers add up to, what will it mean for tomorrow and how will it be paid back? Much of the funding on offer is in the form of loans, not grants, so those affected businesses will need to pay the loans back at some point.
With the government investing such large amounts, it is possible that the government will end up running airlines and hospitality businesses in the future – this state of affairs is not out of the question.
There is always much discussion on ‘wars’ driving innovation – people/ countries want the edge so invest in technology and ideas they may not ordinarily focus on.
Already we have seen this outbreak driving scientific innovation: 3D-printers creating valves for respiratory equipment and scientists developing vaccines and coronavirus detection kits quicker than before.
Understanding these new techniques could impact on the technology we use and future scientific developments.
New business practices
Where possible, companies have had to implement home working for their employees. For our business, ‘working from home’ was a policy we had on the agenda to begin implementing later this year but has been brought forward.
With more people working from home, and, providing it is a success, may result in more businesses adopting these working practices, and thereby reducing their office space and overheads?
Companies will also be making better use of technology, such as Zoom, Teams and Skype, which will also change working practices for those not already utilising this technology.
The positive news is that this outbreak has come after a period of relative stability, which means balance sheets are healthier for a lot of businesses than they were in say, 2008. However, I’m sure it will cause businesses to reassess their finances in the future, being more cautious and mindful of having cash in the bank.
There is also a question over whether dividend payments will be reconsidered and reduced.
Impact on Hospitality and Leisure
Without doubt the hospitality and leisure industry is being hit the hardest with millions of jobs expected to be lost and predictions that it could take the sector 10-12 months to recover. The repercussions are going to be felt for a long time and this is no doubt going to affect how the sector will look in the future.
Will people be more risk adverse when booking holidays and choose to stay local? Will chains of restaurants be quite as prevalent? Will ‘black swan’ clauses be put in all contracts?
We are still in the early days, but it is interesting to consider what the future of business will look like and what lessons will be learnt and taken forward.
If you are concerned about the impact of coronavirus on your business and need any support or advice, our team is here to support you, please get in touch or visit our business support page.Back to top