Entrepreneurs embrace opportunity while economic uncertainty create challenges
Business owners are wrestling with uncertainty and economic challenges but, for those that are well-set and forward-looking, now can be the right time to accelerate growth plans.
Fast-growing and ambitious South West businesses came together for a round table hosted by TheBusinessDesk.com and Shaw & Co that explored how entrepreneurs are navigating the current landscape and delivering on their own plans.
Funding remains a live issue for those companies looking to scale, and the market conditions are presenting interesting conditions.
James Cowdale, from clothing brand &SONS, acknowledged that “it’s really difficult” as a company that has not been through the investment journey.
“We've gone from zero to £11m this year in eight years, which for us is a big deal, and we're learning as we go,” he said.
“We've debt funded the business up until this point. We want to make a dent and we want the business to scale much quicker.
“There are lots of conversations with the usual people, but none of which we walked away and gone ‘you can see us working with these people’. Because they want to come in and change the business. Don't change the business, DNA is just so critical to the whole thing.”
[caption id="attachment_23359" align="alignleft" width="300"]
Rob Starr[/caption]
Rob Starr, head of M&A at Shaw & Co, highlighted there is an opportunity for strong businesses to be even more attractive to potential investors.
The market has quietened after a surge of activity in anticipation of tax changes before the 2024 Budget, but funders still need to deploy cash.
He said: “There's plenty of money around. Private equity are struggling a little bit because they can't find good assets to invest in, so the bigger funds are coming down and looking at smaller assets.
“They are also struggling a little bit with some of the assets that they've got. But they've still got this money that they've got to look to invest, and they're struggling to find assets.
“This means that if you do have a business that you're thinking of exiting, now is a good time, because the valuations are likely to be pushed up - especially if it's a good asset - because a lot of people are chasing the same asset.”
Steve Butterworth has received some of that interest as potential funders and investors have identified community engagement and investment platform Neighbourly as an attractive proposition.
He said: “We've seen interest in private equity, which I would not have expected at this stage in this business's life cycle, because we're still at a relatively early stage to scale up. But PE has definitely come down, metrics have moved.
“We're certainly seeing a level of consolidation going on. Sometimes that's being led by a corporate that's doing a buy-and-build strategy, often backed by the big US growth equity players, so they've got deep pockets.
“We're seeing a lot of activity, and a lot of businesses saying, ‘right, now's the time’. And there are good assets out there, and you can put more money to work quicker with a consolidation play, which obviously is why PE are getting interested.”
Serial entrepreneur Andrew Scott, of Purplex Marketing, is optimistic about the opportunities the market volatility can present.
“I set my first business when I was 19, and one thing that I've observed is when the market’s nervous, that's the time to act,” he said.
“Over the years we've had different types of crisis, whether that’s economic, as in 2008, or the pandemic.
“My view now is we just want to go for it - we're going to go for it and look at where the opportunities are.”
In part two of this special report the entrepreneurs focus on AI and the role of technology in creating productivity improvements and driving change.
Fast-growing and ambitious South West businesses came together for a round table hosted by TheBusinessDesk.com and Shaw & Co that explored how entrepreneurs are navigating the current landscape and delivering on their own plans.
Funding remains a live issue for those companies looking to scale, and the market conditions are presenting interesting conditions.
James Cowdale, from clothing brand &SONS, acknowledged that “it’s really difficult” as a company that has not been through the investment journey.
“We've gone from zero to £11m this year in eight years, which for us is a big deal, and we're learning as we go,” he said.
“We've debt funded the business up until this point. We want to make a dent and we want the business to scale much quicker.
“There are lots of conversations with the usual people, but none of which we walked away and gone ‘you can see us working with these people’. Because they want to come in and change the business. Don't change the business, DNA is just so critical to the whole thing.”
[caption id="attachment_23359" align="alignleft" width="300"]
Rob Starr[/caption]
Rob Starr, head of M&A at Shaw & Co, highlighted there is an opportunity for strong businesses to be even more attractive to potential investors.
The market has quietened after a surge of activity in anticipation of tax changes before the 2024 Budget, but funders still need to deploy cash.
He said: “There's plenty of money around. Private equity are struggling a little bit because they can't find good assets to invest in, so the bigger funds are coming down and looking at smaller assets.
“They are also struggling a little bit with some of the assets that they've got. But they've still got this money that they've got to look to invest, and they're struggling to find assets.
“This means that if you do have a business that you're thinking of exiting, now is a good time, because the valuations are likely to be pushed up - especially if it's a good asset - because a lot of people are chasing the same asset.”
Steve Butterworth has received some of that interest as potential funders and investors have identified community engagement and investment platform Neighbourly as an attractive proposition.
He said: “We've seen interest in private equity, which I would not have expected at this stage in this business's life cycle, because we're still at a relatively early stage to scale up. But PE has definitely come down, metrics have moved.
“We're certainly seeing a level of consolidation going on. Sometimes that's being led by a corporate that's doing a buy-and-build strategy, often backed by the big US growth equity players, so they've got deep pockets.
“We're seeing a lot of activity, and a lot of businesses saying, ‘right, now's the time’. And there are good assets out there, and you can put more money to work quicker with a consolidation play, which obviously is why PE are getting interested.”
S
erial entrepreneur Andrew Scott, of Purplex Marketing, is optimistic about the opportunities the market volatility can present.
“I set my first business when I was 19, and one thing that I've observed is when the market’s nervous, that's the time to act,” he said.
“Over the years we've had different types of crisis, whether that’s economic, as in 2008, or the pandemic.
“My view now is we just want to go for it - we're going to go for it and look at where the opportunities are.”
In part two of this special report the entrepreneurs focus on AI and the role of technology in creating productivity improvements and driving change.
