The last year has seen businesses facing many challenges, from Brexit to Covid-19. It might seem that many companies would be struggling to stay afloat, let alone grow. For some firms in the Swindon and South West area, however, a new report from BGF, the UK’s most active investors in business, suggests that investments made during the pandemic may lead to expansion during 2021.
The research
Information contained in the report comes from a survey conducted by Deloitte, acting as an independent research provider commissioned by BGF. BGF is the largest active investor in the UK and was working in partnership with the University of Buckingham. Interviews were given by CEOs, CFOs, COOs, directors, owners and partners at 532 companies, 38 of which had a base in the South West, including Swindon.
A wide range of businesses from Swindon and the wider South West were surveyed for the report. Some had as many as 499 workers whilst others had as few as 20 employees. Annual turnover ranged between £2 million to as much as £150 million. The focus was on growth economy companies and their attitudes and responses to the pandemic. Surveys took place during October and November 2020.
The results
It seems that Covid-19 has indeed impacted performance, with 58% of the Swindon and South West businesses surveyed admitting they had concerns around future expansion, particularly relating to risks around operational growth. This did not prevent them expressing hope for the future, however, with 68% seeing 2021 as an opportunity to expand. More than half thought their companies were working as or more effectively as before the pandemic, with 63% considering their work culture to have improved.
South West companies have also demonstrated adaptability in the face of the rapidly changing economy. Around 87% of firms had sought alternative forms of funding, including the government’s furlough scheme and Business Interruption Loans. Over a fifth of owners had made personal investments in their own businesses, whilst 13% of companies looked to private equity funding.
Plans for future investment included expansion into new sectors and improved technology digital infrastructure. International growth was also seen to have major potential. Less consistent were employment figures, with 18% of businesses seeking some redundancies whilst 16% were making plans to expand hiring.
Comparison to the rest of the country
This research also shows the resilience of firms in Swindon and the South West in relation to the rest of the country. The 73% of businesses on average that stated they had enough financial stability to seek increased growth in the near future increased to 80% in the West Country. In general, South West firms seem considerably more optimistic about the future than their counterparts in London and the South East.
Only 37% of respondents in the South West expected to return to previous ways of working after the pandemic, which was a significantly lower figure than in other parts of the UK.
Ned Dorbin, head of BGF’s South West and Wales division, responded to the results by saying: “Amid the great uncertainty of 2020, South West growth economy businesses remain focused on their expansion and have the drive to grow. South West growth firms have shown great resilience – uncovering opportunities to pivot their offering or enter new markets. This is positive news as we move into the new year and companies start to think about their longer-term goals once again.”
