Richard Murray reviews how business owners are feeling right now, based on our conversations with a wide range of SME leaders in recent weeks:
Just a few weeks ago, our conversations with business owners were starting to sound more optimistic. There were genuine discussions about the “green shoots” of recovery as many businesses began to feel confident about the year ahead.
But the global landscape can change quickly. Recent events in the Middle East have once again reminded us how interconnected and unpredictable the world economy can be. In a matter of weeks, sentiment has shifted from cautious optimism to renewed uncertainty. We’ve spoken to business owners in the last couple of weeks who are telling us it feels hard.
But we also know that for UK business owners, this is not unfamiliar territory. Over the past six years, they and their companies have navigated extraordinary volatility. From Brexit, followed by COVID-19 to the war in Ukraine and the economic ripple effects that followed, it feels like we are permanently facing difficulties. Global events create shockwaves that reach far beyond their origin. But the UK’s six million SMEs have become incredibly resilient in the face of constant change.
The truth is that over the past six years, SMEs have absorbed major policy shocks, faced rising employment and compliance costs, operated in a more regulated, data driven environment, whilst at the same time, and with help, have become leaner, more data driven and more professional. This sets them up for ongoing success.
In our conversations with business owners right now, we’re hearing understandable concerns and questions about what the future might hold. Rising fuel costs, increasing energy prices, and the wider economic impact of geopolitical instability are all on people’s minds.
But while those concerns are valid, many of these factors sit firmly outside any individual business owner’s control.
We always say control the controllables. Focus on what is in your hands to manage.
Clarity is incredible important. The most confident business owners we speak to are those who know exactly what they are working towards. They understand their personal and financial goals, and they know what their business needs to deliver to achieve them.
One of the most powerful starting points is identifying your financial freedom figure, the amount of wealth you need to generate to step away from your business and fund the next phase of your life, whether that’s retirement, a new venture or simply more freedom.
From there, the key questions become clearer:
- What do your pensions and investments currently look like?
- How much will your business need to contribute to reach that financial freedom figure?
- And importantly, is there a gap between where you are today and where you want to be?
This means that if the war in the Middle East, or the next issue that comes along, feels like one curve ball too many, you can decide whether you can afford to exit your business.
Many owners haven’t taken the time to fully explore their options or understand what their exit journey might look like. Yet having that clarity can be incredibly empowering, even if you have no immediate plans to sell.
So if there is one action we would recommend for business owners as we close out Q1, it is this:
Get clear on your numbers.
- Understand your financial freedom figure.
- Understand what your business needs to contribute to your future plans.
- And identify whether there is a gap between where your business is now and where it needs to be.
You can’t control global events. But you can control how prepared you are for whatever comes next.
Get in touch to find out how we can help you to understand if you can afford to exit your business. Or connect with Richard on LinkedIn.