Life has been difficult for the entrepreneur these past two years. Economic disaster has been followed by more of the same; and to top it all, we appear to be reverting to the strike-ridden eighties as one or more of the unions battle it out in the war zone we used to call the board room.
This long running turmoil, along with the unchartered territory of a coalition government, has resulted in an uncertain time for entrepreneurs and SMEs. Since the election campaign process began, right through to the present-day anticipation of the upcoming Budget, many people have been hoping for change from the new government but, most of all, businesses are eager for certainty of some kind. What we have so far is, well, not certainty, that’s for sure.
Entrepreneurs are used to making quick and effective decisions and dealing with the ramifications, good or bad. However, with the economy in – at best – a state of flux, we are finding we must hesitate more than feels entirely natural.
As a corporate financier, my job is to help entrepreneurs realise their wealth in a sale, or identify opportunities to buy a business to add to their empire, and then raise the funds to support the transaction.
But now, with the coffers all but barren in the banks and the looming fear of changes in CGT and VAT, we must all wait again to hear the new Chancellor dictate on doom and gloom and enforced austerity.
Generally speaking, the entrepreneurs I have worked with have been an optimistic bunch (it goes with the territory as, frankly, a pessimistic entrepreneur is an oxymoron). But optimism requires you to have at least a modicum of control over a given situation; something that seems, in the current economy, to have all but evaporated.
The problem is that August looms large, a month where doing a transaction is nigh on impossible as one or more parties disappear, and deals, at best, shunt unsteadily along. Of course, at worst, they simply stop.
No sooner have we got back from our holidays then, guess what, it’s nearly Christmas! Yet again another reason to wait and wait, and yes, wait again.
So, whether you watch the Budget tomorrow or not, don’t hold your breath too long as the outcome is inevitable (just like taxes) and the entrepreneur will need to make quick decisions. Certainly, if they want to remain ahead of the pack, hesitation may cost them more than they can afford.
Jo Haigh is head of corporate finance for MGR.
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