Luke Davis, CEO of IW Capital, discusses the factors that make the next few months an ideal time to be a growing small firm.
The government yesterday set out its plan for the final easing of coronavirus restrictions on the 19th of July, providing a boost to hospitality, nightclubs and events that have either been closed or operating at reduced capacity for nearly a year and a half.
The end of the recommendation for employees to work from home where possible also provides a boost for city centre businesses reliant on commuter trade. For small businesses especially, the news will be welcomed with open arms and many are now poised to grow rapidly with the help of record investment over the past year. £8.8 billion of private equity capital was invested into small firms in 2020, with the figure for the first quarter of 2021 already reaching £4.5 billion.
This record investment follows a year when UK entrepreneurs showed their resilience, over 800,000 started businesses in 2020 with many more founded in the first half of 2021. Confidence among business leaders is also at a high not seen since the Brexit referendum, signalling a momentous shift in attitudes after what has been one of the most challenging years in the post-war era.
Luke Davis, CEO of IW Capital, comments:
“The end of restrictions, although not without its risks, provides the clearest sign for businesses yet that normality is on the horizon. The reopening of the rest of the economy provides a boost not only to the business forced to stay shut until this point but to all the other firms that help them operate. Higher capacity at theatres helps the restaurant industry and a return to the commute will benefit the city centres that have been eerily quiet at times.
“From what we have seen from our portfolio companies and investors, it also looks like we will experience a desire for small businesses to grow with the continued support of the private investment community. At IW Capital we have made several significant investments throughout the pandemic in companies that have gone on to enjoy tremendous success and in doing so have seen record demand from investors to support them.
“Reopening, record investment, consumers looking to spend and the ambition of the UK’s entrepreneurial economy all points in the direction of a summer of growth which could continue well into 2022 as we approach pre-pandemic conditions once more.”