World events and their full impacts

How to be flexible in changing landscapes

Remaining optimistic in the current economic landscape poses a significant challenge for businesses. It is difficult to escape the pervasive media coverage highlighting economic uncertainty, which is not only disrupting the UK but also globally. Looming significant events such as the general election set to take place this year, alongside potential challenges such as flooding and climate change, undoubtedly will cause further disruption to businesses throughout 2024.

Yet, at Price Bailey, we see an opportunity for ambitious businesses to thrive in periods of economic uncertainty; through the correct preparation, adopting the right approach, and seeking expert guidance, businesses can buck the trend and prosper. We are committed to guiding our clients towards success, emphasising that even amidst disruption and uncertainty, there are opportunities to be seized.

In our ‘World events and their full impacts’ video, Price Bailey partners Andrew Park and Simon Blake discuss exactly what considerations businesses must make to stay ahead of the challenges. Answering the question of How can my business succeed in uncertainty? we examine businesses that have excelled in previous times of economic hardship, current business challenges, and how best to approach potential challenges in the future.

Business challenges won’t always be expected; therefore, we urge our clients to prioritise wholly understanding their business in order to react accordingly and remain one step ahead. By ensuring proper business planning, periods of uncertainty can be confidently reacted to or prepared for when recognised. Should you require any advice or have any questions for one of our experts, please use the form below to contact one of the team.


Video Transcript:

00:01 – Andrew Park

We’re still at the mercy of world events as well, aren’t we? More potential supply line shocks, I read just before we filmed this… literally a few minutes before… that the Iranians have just sunk an American oil tanker in the Gulf of Oman. It seems like there’s always something at the moment to fan the flames of uncertainty. Ukraine still isn’t settled, Taiwan is still a concern, and all be it the anti seems to have dropped a little bit on that recently.


00:52 – Simon Blake

And a US election as well.


00:54 – Andrew Park

Yeah, I suppose the flip side is that there are a few feel good events that are going to happen in the year that might just give us all a lift and maybe even the economy a lift. There’s the Olympics coming up in Paris.


01:09 – Simon Blake

I thought you were talking the Taylor Swift world tour!


01:19 – Andrew Park

There’s the Euros isn’t there, the Euros coming up this year? It’s going to be interesting to see what happens to public sentiment one way or another.


01:35 – Simon Blake

It does. I can give a couple of examples, actually, because I did a valuation on a farming business in East Anglia growing vegetable crops about 18 months ago, and at that point I was given a very prudent outlook, understandably giving what was going on with the price of wheat rising and the price of energy following the beginning of the outbreak of the Ukraine war.


This week, I’ve just been reinstructed to update valuations on the same business, because the forecasts that I was given back 18 months ago we now know the actual results were far stronger. And the flip side, for instance, of food inflation, is, of course, those producing food that were able to manage their costs and saw, therefore, prices at the till go up, hand they have actually made very strong profits. Similarly, those that have been able to force price rises elsewhere and agree cost reductions in their supply chain have seen profits rise, and so there are plenty of examples of businesses that have been able to use the volatility, I suppose, that’s caused by these events around the world, macro and micro and whenever there’s volatility, there are both losses but there are also gains. There has to be somebody on both sides of that equation, and it seems that actually we’re beginning to see some of the upsides coming through.



We’re always very quick to focus on the downsides and the risks, and rightly so. And again, entrepreneurial business the sector we work in most is generally able to react faster both to the difficulties and to the opportunities. It’s much quicker to steer a small boat or a little yacht than it is to change the direction of an oil tanker. And if we can refer to the size of companies, the owner managed business can decide at a flip of a coin to change direction. The large international conglomerate takes rather longer.


04:03 – Andrew Park

One thing we haven’t really talked about, Simon, but I just wonder have you seen many people in the last year looking to sell their small boat, or little yachts, so to speak, ahead of a labour government that there was some talk that a lot of entrepreneurs were looking to sell their businesses?


04:23 – Simon Blake

We haven’t seen that much pickup yet, other than in the entirely normal scenarios of retirement. So we haven’t seen an exceptional change, particularly focusing on known events coming up, such as the election. We’ve continued to see overseas interest in the UK because the sterling remains weak in the UK economy and therefore the UK is an attractive place for inward investment, and likewise we’ve continued to see the UK struggle with its exports because, for exactly the same reason, the pound is too weak, and so that hasn’t really changed, I would suggest, in the last year or two. What I guess we haven’t also seen is other parts of the world have grown out of the difficult times of Covid and high inflation quicker than the UK has. Our inflation rates remain stubbornly higher than many others in the Western world and the G7, which is a frustration, but that is the case.



I think the key is actually being able to know what is going on in your business and be able to also know what that means in the near future so that you can make the tweaks to the direction quickly, so understanding the key aspects that matter for your business. How reliant are you on unemployment, for instance? Let’s take our business for a moment. We are entirely reliant on being able to retain and recruit quality staff, quality professional staff for our business, and that means we’ve got to be able to make sure we don’t lose the good staff because others around us are suddenly in demand and going to quickly increase the opportunities they offer to our staff, who they know have been trained well, whilst at the same time actually ensuring that we can bring in new staff as well to meet the growth opportunities that we have right now, and that’s something we’re particularly seeing in the audit sector.

So I think it’s really just making sure that business owners really understand what are the key things that make their businesses tick, what are the key things that make material differences that they can adjust when changes come out of the blue, whether it be through a change of government, a change of taxation or, unfortunately, a new war, or perhaps even a weather event, as we see climate change becoming a more significant part. When we look at the amount of flooding that is beginning to happen around the UK, parts of the UK that are seeing flooding that have never seen it before and suddenly actually could have a dramatic either directive issue for the business in question that is being flooded or a change in the market arising from the more generic problem of more rain, more water, milder temperature across the year, etc. So I think it’s all about, for me, knowing your business and business planning, understanding what you can tweak and knowing how you can ensure you can tweak those things quicker.



I mean, another factor for me that I am surprised we have not yet seen more change of is the use of long-term leases, particularly in people-related businesses where, again, like our business, you have historically had most of your staff working in an office, whereas today, for many professional services firms, there is still this substantial amount of working from home and that is assumed that that will be the new norm, at least to some extent, for the ongoing, for the future, and therefore the question of actually can you project five years or ten years ahead of what your requirement is for property when you are faced with signing a new lease on your offices, or actually, are you better to now move towards the serviced office model, where you are agreeing 12-month arrangements rather than five to ten-year arrangements for your property needs?



I think that is one of those fundamental shifts that young businesses are actually much more able to be nimble and make good decisions over traditionally or older businesses probably maybe would be in this category often as well will find it more difficult to make those changes, either because we are currently tied into those leases themselves or the culture of having our own office is actually hugely difficult to break even when it is not being utilised anywhere near as much as it used to be pre-COVID.


10:03 – Andrew Park

I think where private individuals are concerned and a slightly allied theme I think really people need to take the time to actually stop and think what do they want from every aspect of their life, whether it is any business interest that they have got, but also their investments, their family, where they want to live, where they might want to educate their children, the broader aspects of their life, just so that, if changes do materialise, that they are clear about what their options might be. For instance, if Labour comes in and suddenly abolishes the whole non-dom regime, some people may be tempted at that point to move overseas. Some people actually will decide that they rather like it here and that if they lose a few tax advantages it is still a price worth paying. It helps to actually have an understanding personally and with spouses and the broader family about what you all want and what your life objectives are.



I think as well the incoming Labour government just as an example, with the VAT abolition that they are talking about on school fees, they have also put a marker down that they will introduce legislation so that anybody who tries to pre-empt that by paying for their school fees years in advance while those fees are still VAT-free will be hit with a tax charge. I think that signals a certain mentality where any incoming Labour government is concerned, that if they think people are a bit cute, they will find a way to hit them anyway. I think really know what you want and then be ready then to actually take decisions based on things that we actually can’t clearly predict at the moment.


We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.


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