The shifting priorities of entrepreneurs in the time of COVID-19

The readiness of our entrepreneur clients to adapt to new challenges has long been a common characteristic, and our latest research shows it holding firm even in the face of today’s massive social upheaval.

Tellingly, it was cash reserves rather than government support, which scored highest when we asked about the possible solutions to these tough operating conditions.

The vast majority of entrepreneurs surveyed (85%) put access to cash at the top of their list, with 81% of respondents also ranking cheaper borrowing costs as a top tool.

In what may come as a surprise to many, far fewer respondents – just 55%  – said that an extension of the UK government’s furlough scheme would be helpful, and only 25% believed it would either be very or extremely useful. This suggests that, while the scheme helped businesses keep employees in the short term, entrepreneurs prefer independent solutions over government support moving forward.

With lockdowns making it difficult to connect with people, entrepreneurs highlighted the ongoing importance of networking with their peers to share ideas and find support. Roughly three quarters of the survey respondents (74%) put an emphasis on the value of peer networks in helping them face the challenge of the current crisis.

Greg Kyle-Langley, Coutts Head of Banking and Wealth Management, highlights the bank’s vital role in bringing people together, even as the COVID-19 pandemic hinders face-to-face meetings. “We’ve a history of connecting our pioneering clients so they can meet like minds and gather new perspectives. And when you need a critical partner who has been there through thick and thin, our advisers will help you make the right decisions for your business and family.”

While finding talented people and capital remained key challenges for entrepreneurs, the extraordinary circumstances we find ourselves in did mean that the focus had slightly changed. The need to find talent fell to 23% in 2020, compared to 36% in 2019, but there still appears to be an appetite for recruitment - almost two-thirds (64%) of respondents disagreed with the statement that they were deprioritising hiring people as a result of the pandemic.

While the second highest concern – access to capital – has fallen to 20%, from 28% last year – the need to find new markets has in contrast, become more important. In 2020, 19% of entrepreneurs highlighted this as their main concern, compared to just 7% 12 months ago. It suggests entrepreneurs are beginning to think about diversifying their operations in response to the pandemic, perhaps realising the danger of being overly dependent on markets that can too easily and quickly be disrupted.

There was also a slight rise in concerns over automation (up to 5% from 3% in 2019) – likely a result of how quickly people have adapted to working and managing their lives online through lockdown.

Interestingly, the number who considered building a diverse workforce as their greatest challenge more than doubled to 5% in 2020, from 2% in 2019. This may well be tied into increased awareness of the importance of diversity and inclusion as a result of recent events.

While entrepreneurs remain focused on their current businesses, it should be no surprise to find that the next opportunity is never far from their minds. In fact, our research shows that many have identified this as a moment to look towards new ventures.

Over a quarter(26.5%) told us they were interested in reinvesting in other industries to safeguard the future of their company, and 36% said they were looking towards new industries or trying something new. With the COVID-19 pandemic turning many of the old ways of doing things upside down, it’s clear that those who can adapt are better positioned to take advantage of opportunities for new business.

There are two clear issues dominating the outlook for UK business in 2020 – the COVID-19 pandemic and Brexit. But we’ve found that far from being cowed by the challenge, entrepreneurs are looking for new ways to thrive as the ground shifts.

When asked about the impact of COVID-19 on their businesses’ long-term outlooks, 30% of our entrepreneurs said that it had in fact had a positive effect, with a further 26% saying it had not impacted their outlook. With regards to Brexit, 41% of respondents said it made no difference to their outlook, while 29% said it made them more optimistic.

But what we have found is that entrepreneurs can’t do it alone. They’re looking for support,  encouragement and ideas from their peers, transitional support from government to help them seize new opportunities, and advice from their bank to help them make the best decisions.

At Coutts, we’re uniquely positioned to provide the support they need. We have a network of entrepreneur clients ready to help with advice and investment if needed, and experienced advisers to point the way through the challenges of 2020 and beyond. We continue to be the natural home for the UK’s most prominent entrepreneurs, as we’ve been for over three hundred years.