The crisis caused by COVID-19 is slowing down the organic growth of business. Industries dependent on political factors, trade disputes between countries and other geopolitical changes have suffered the most. Given that consumers tend to postpone purchasing decisions, it is becoming increasingly clear that profit growth will be a challenge. Growth may also be constrained by difficulties in attracting talent or a lack of investment in innovation. In both cases, especially for companies with limited capital, the solution may be M&A.
Another trend worth noting is the increasing importance of M&A deals for business survival. Although interest rates in Ukraine have fallen sharply, questions remain over the ability of many companies, including SMEs, to service or refinance existing debt and access affordable new debt as a means of financing working capital. It is likely that we will see some lenders raise interest rates to offset the estimated increased lending risk in certain sectors or freeze lending to some sectors (such as renewables) altogether. This will mean that for some companies it will be necessary to raise funding through M&A deals. In any event, sellers must be well prepared, both to attract an investor and for the transaction itself.
We should not go back to what we did before but sum up the real results and ask ourselves if they make sense in the new reality. In today's challenging environment, where fears of viruses, travel restrictions and economic shocks prevail, it is very important to adjust strategy and communication with customers.
You need to listen to your main customers and meet their needs. This crisis offers a unique opportunity to build trust with customers and build a business around their needs. It also means understanding how they want to buy and receive a product or service. The ability to quickly adapt existing goods, offers and services to new consumer needs becomes important.
Those companies that have the necessary digital infrastructure and experience in organising online business processes will fully enter the era of the new reality. Your IT infrastructure should allow you to switch to remote operations in one day without losing efficiency.
Employers have realised that they could effectively manage remote teams and saw the potential to reduce real estate costs. This hastened the arrival of a longawaited trend: the separation of human resources from the office location.
People still need food, clothing, equipment and entertainment. And business must meet these needs. The new way of life will probably require some adjustments, but will not eliminate our needs. Only forms, methods and approaches to consumption will change. Most companies are refocusing on new niches, and it may be worth thinking about creating such niches from scratch.
Industries dependent on political factors, trade disputes between countries and other geopolitical changes have suffered the most.
The most important factors that affect the success of a deal in the post-Covid era, remain exactly as they have always been: