As a business owner, you wear multiple hats. One moment you’re the accountant, another moment you’re managing your staff team, and still another moment you’re working directly with a client.
In so-called normal times, this all would be a lot to juggle, but during these uncertain times that began in 2020 and continue into 2021, how do you plan to manage your business in a world that remains unpredictable?
With distribution of the COVID-19 vaccine picking up, more Americans are receiving shots and new cases are trending down. President Joe Biden signed the American Rescue Plan Act, approving an addition $1.9 trillion of stimulus, which will help support individuals and companies particularly impacted by the pandemic. We are starting to see the light at the end of the tunnel. And as consumer confidence grows, pent-up consumer demand is starting to unleash and we can expect to see more capital expenditures by businesses. In Springfield, we already are seeing an increase in merger and acquisition activity for middle-market companies, as well as an uptick in activity for businesses in the construction industry, convenience stores, retail and manufacturing.
Even after we have a return to somewhat normalcy, challenges will remain. The pandemic has fundamentally changed the way businesses operate, so it’s important to work with a financial partner on a strategic plan that takes into consideration these new norms, such as utilizing technology to meet online rather than in person. Advisers work closely with clients to focus on what they want the business to look like one to five years from now, how they want to impact the Springfield area, and how they can leverage some of the changes in buying habits and customer relations that will be a holdover from the pandemic.
Springfield companies will need to remain flexible. For example, companies in the retail space have experienced a significant decline in foot traffic, and this will not suddenly be a nonissue once the pandemic eases. In order to compete with online sellers, these businesses will need to create an experience that drives customers through the door or leverage an easy-to-use online platform that will allow them to reach a broader base of clients. Similarly, restaurants may find patrons continue choosing carryout or delivery versus dining in. As such, these companies will need to evolve their business models to meet customers where they are rather than automatically reverting back to pre-pandemic practices.
As a business owner, there are some important steps you can take as we continue to navigate through the pandemic and begin to plan for what the future may look like when we find ourselves on the other side of it:
• Do an evaluation of the needs of your business to determine the most efficient means for success. This could include reducing office space, increasing a technology budget allowing for remote employees, or the need for more of a specific type of space in order to accommodate growth.
• M&A activity has experienced a significant uptick, nationally and here in Springfield. Are you in a position to buy a business or a share of it? Conversely, if you’re near retirement, are you ready or interested in selling?
• If you are in the position of buying or selling, think of future generations. If you have family or staff members who you think may want to be involved in the business, it’s better to bring them into the conversation sooner rather than later – and allow your financial advisers help ensure everything is structured in a way in which all (or most) parties are satisfied. Throughout this past year, we’ve seen more business succession activity in the Missouri region than we have ever before.
Although COVID-19 has created unprecedented challenges for business owners, it also presents opportunities as old conventions are reevaluated and new ways of conducting business have been tested and proven over the last 12-plus months.
Byron Pierce is a senior vice president and commercial team lead for UMB Bank. He can be reached at firstname.lastname@example.org.