How to find growth in a declining sector
The COVID-19 pandemic has presented great challenges to almost all business owners, but some sectors have suffered more than most.
Industries such as hospitality, travel, arts and entertainment have been among the hardest hit, with mass job losses and many companies collapsing into insolvency.
Even as the economy emerges from the worst effects of the virus – with UK gross domestic product growing by 0.9% in November to put the economy back above pre-pandemic levels1 – much uncertainty remains. Indeed, sectors such as entertainment and hospitality could take until 2025 to return to their pre-COVID-19 levels, according to research from the consultancy firm McKinsey.2
Yet even in the areas of the economy most affected by coronavirus, there are multiple examples of businesses demonstrating the innovation and agility not to only survive, but to thrive.
Bucking the trend
One such business is TBI Media, a London-based producer of live content and events. In March 2020, as the reality of the pandemic set in, TBI’s Director of Events, Andrew Wyke, scrambled to rearrange the 60 live events the business had planned for the remainder of the year.
It was a precarious time for the company, with many of the events delayed and then cancelled. But fast forward nearly two years and TBI will have more than quadrupled turnover and profit in the 12 months to April 2022.
How did it do it? “I think we’ve become much broader-minded about the business,” says Andrew. “It’s a cliché that necessity is the mother of invention, but it’s true. We’ve been forced to get out there and fight for new types of business.”
TBI was able to demonstrate two of the most important attributes for any company hoping to grow in a declining market: resilience and agility.
The business has two divisions – live events, which was almost completely wiped out with the first lockdown, and a content division. By switching focus to creating high-quality digital content for new and existing clients, TBI was able to grow its business while many other firms in its sector were struggling for survival.
“We had the advantage of a content division that was getting busier, almost immediately,” says Andrew. “The consumption of content was only going to increase during the pandemic.”
That allowed TBI to approach new clients and offer its expertise in broadcasting events to produce content for a ready-made audience sitting at home waiting to be entertained.
Among the big client wins were TikTok, with whom TBI worked to create a virtual festival filmed at a coronavirus-safe closed nightclub in London, and YouTube, which produced a virtual concert with the opera singer Katherine Jenkins at the Royal Albert Hall.
Andrew says the key to succeeding in a difficult market was embracing new technology to find more growth and profitability. By discovering new technology platforms to work with, TBI was able to pivot into corporate conferences, again opening a new revenue stream with new clients.
“The business has become more multilayered,” says Andrew. “There are more strands to it than there were before and they will all carry on, even as we return to live events.
“You need some good fortune as well, but the most exciting thing for me is that it wasn’t a fluke. We’re expecting to grow from this point as well.”
Top tips for growing your business in a tough market
Martin Brown, our Chief Executive, says: “In the depths of something like a pandemic or a major downturn in business, it’s pretty clear that some organisations, regardless of what they do, will not be able to survive.
“You have to take a step back and acknowledge that you must make some decisions. What are the things you could do to think about your clients and your business model? You need to be agile enough to adapt your business model to make the best of whatever the circumstances might be. You can understand what it takes to survive by looking at your cash position and working out what you need to cut to find a route out of the situation.
“There are some pretty tough and very emotional business choices to be made. If you procrastinate and don’t make them, then you won’t survive much longer.
“However, if you were a good business going into the pandemic, you’re probably going to be a good one coming out of it if your leadership and guidance has been right. There will be brands that will emerge from this that will become fantastic businesses.”
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This article is written for the St James’ Place Entrepreneurs Club newsletter.
1 GDP Monthly Estimate: November 2021, Office for National Statistics, January 2022
2 COVID-19 Recovery in Hardest-hit Sectors Could Take More Than Five Years, McKinsey & Company, July 2020