As major disruption to supply chains continues across the country, Grant Thornton UK LLP’s latest Business Outlook Tracker finds that a perfect storm of temporary and structural supply chain challenges, from changing Brexit regulations to production delays, are threatening to create a winter of discontent for UK businesses and consumers alike. Over the last few months, the UK has been facing severe supply chain disruption resulting in delayed deliveries and increased prices. One in five of the 605 mid-sized businesses surveyed said they are finding it harder to move products around the UK and across the world because of the ongoing issues. The research finds that there are a range of problems contributing to the disruption, but the main issues cited by respondents who said they have been negatively affected were found to be: Delays from source production facilities (23%), Changing rules and regulations from Brexit (21%) and International delays in shipping (21%). While not ranked individually within the top issues, collectively, over half of respondents who said they have been negatively affected said problems relating to a lack of available workers was a major blocker. Including shortages in skilled (18%) and unskilled (19%) operators, and shortages in transport workers, including heavy/large goods vehicle drivers (19%), and specialist transport workers (18%). Dave Hillan, partner and practice leader at Grant Thornton UK LLP in the Midlands, said: “The Midlands has always been famed for its productive capabilities, in fact much of the UK relies on this region’s ability to manufacture, store and move products. As the supply chain issues bite however, many of the businesses that rely on this easy flow of goods, materials, ideas and innovations will increasingly struggle. “It’s clear that there is not just one problem behind the current supply chain disruption, rather an amalgamation of problems, including structural issues such as Brexit related uncertainties, skills shortages, shipping bottlenecks, pandemic pressures and production delays. It really is creating a perfect storm and the combination of these factors are having substantial knock-on effects further down the supply chain. “There is also the potential for things to get worse for businesses before they get better. Many businesses may not be aware that they are currently benefitting from a range of phased Brexit implementations measures, including grace periods around rules of origin. With this set to change from 2022, when further border measures come into force, businesses need to ensure that they are prepared and ready, to avoid a shock and even further disruption.” Ongoing supply chain issues are also found to be impacting profit levels across the mid-market. Over one third (39%) cited that they are facing reduced profits due to the continued disruption. Profit expectations over the next six months across the mid-market have also dropped -18pp compared to Grant Thornton’s last Business Outlook Tracker survey in August. As businesses continue to build their recovery from the pandemic, one quarter of businesses (26%) also cited supply chain disruption as a top threat to their growth in 2022. Dave Hillan added: “We are enduring a tough period where the panic buying of fuel, food and even Christmas toys has become part of our national dialogue, along with concerns about the rising costs of energy and consumer goods. Business confidence is clearly fragile, as they continue to try to recover from the pandemic but face an accumulation of challenges. “Businesses are likely to be looking for reassurance that the issues disrupting their supply chains can be resolved, and swiftly. As we look ahead to the Autumn Budget next week, we need to see affirmative action from government to help businesses navigate through these challenges. And businesses will need to continue to draw on the agility and resilience they have already demonstrated so well over the past 18 months to safeguard their business through the winter and into 2022.”

More needs to be done to help staff adjust to a hybrid working environment says a Lincolnshire Managing Director, as research from the University of Leeds shows a 9% increase in staff wishing to work from the office. However just 22% report their office has been redesigned to support the new flexible working regime. Lincolnshire-based commercial interior design and fit out company APSS specialise in creating efficient workspaces to help streamline businesses. Following on from initial research in April 2021, where only 58% of staff wished to work from the office in some form (either full time or a 50/50 split), the most recent research indicates that six months on, 67% now want to have some form of office base for most of the week. “Many of our customers are telling us that working from home is having a significant impact on the culture of the business. They want to bring people back into the office as much as they can to help revitalize the company values and the collaboration that has been harder to achieve at a distance, but most importantly to bring back the office banter. “The longer people work primarily from home, the more disconnected they feel from the company they work for. This research shows, as we move further away from the initial impact of the pandemic, more people want to return to the office to keep that connection to colleagues and the business strong,” Laurence Barrass, MD for APSS said. “It doesn’t matter if you have the best-looking office in the world, if you haven’t adjusted the layout to how you are now working, it can have a detrimental impact on both your staff and the efficiency of your business. But it’s such a simple thing to fix. As an employer, you need to stop, take a step back and ask, ‘What is it that no longer works?’ “Listening to your staff is key to getting the best from your workforce. Experience has shown that we want everyone to perform and produce. Making sure the office is set up right is the way you do that. “When you know the answer to that, you can put a plan in place. This will enable your staff to be more productive and morale can quickly improve,” Laurence said. Following a survey of more than 1,000 office workers across the UK, it appears many employers are still working things out as they go, instead of taking a planned approach. “We can really see customers embracing a new way of working and seeing the positives in reorganizing their workspace to help them get the best from their work area and staff. We have spoken so much about how people still want the open plan office environment and culture to survive. Maybe not in the way it was pre-pandemic, but still in some form to provide the ability for staff to bond,” Laurence continued. “Although businesses appear to be more confident with how they will work going forward, we appreciate there is still a lot of uncertainty in the air,” said Laurence. “Understandably, businesses do not want to invest a lot of money in a temporary solution. Creating a planned approach as to how to move forward and seeing what could be improved in your office, can have long term positive effects. This includes increased staff productivity, morale and efficiency.” “It is so important to have an office that works for your business in both style and layout. There are some really easy ways to adapt your office without having to commit to a full refurbishment,” Laurence continued. “Take a step back and look at how you are now working as a team. If you’re implementing a hybrid working policy, do you now need more meeting spaces or more Zoom meeting rooms to allow for privacy when in the office? Do you need less in the way of desk space as you only have half of your staff in at any one time? “Installing glass partitions to create more meeting space can be a huge help to businesses who need to create additional privacy and it is relatively easy to do with demountable partitions. It also means if your requirements change later down the line, these can easily be relocated if needed.” With nearly 25 years of experience in office design, refurbishment and fit outs, APSS has helped businesses across the UK provide effective, inspirational and productive work environments. With a growing team of over 35 staff, experts are always on hand to help customers create the best working environment.

Over the years, there has been a steady global growth in franchises. Though this has eased slightly as a result of the general uncertainty in the world economy caused by the Covid pandemic, the trend continues. In the UK franchises contribute an annual £15 billion to the economy. In the past decade, franchises have increased by 46% and employ over 621,000 people. Sectors such as accountancy and fast-food restaurants are almost bywords for franchising, wherever you travel in the world, you’re likely to be confronted by that familiar “M” logo in the high street. Yet they continue to show solid growth. For example, a niche Californian operator recently opened its first restaurant in London, and now plans to expand across Europe. The educational sector may, at first sight, seem an unlikely sector for franchising until we consider how more and more English secondary schools are being transformed into independent “academies,” licensed and funded by the government. Brazil is just one country where the lucrative language school sector is increasingly dominated by franchises. In both the UK and other western countries, school closures caused by the pandemic have led to a significant rise in home tutoring, as ambitious parents fret about the possible lasting negative effects on their children’s progress. Many individual teachers who possess abundant expertise in their specialisms, and enthusiasm to pass on their knowledge, but little experience or interest in marketing and the business world, have welcomed the support given by franchisors in growing their activities and their incomes. Hospitality is a notable growth sector, most of the familiar global hotel brands are in fact based on franchises. Who hasn’t been surprised to see a familiar hotel in their locality suddenly bearing the name of a national or global brand? Name recognition, combined with coherent marketing, tends to result in an upsurge in turnover. Rising affluence and leisure in the western world are significant factors in many growth areas. More and more people spend several hours a week in their local gym or swimming pool. The support enjoyed by franchisees, along with their larger budgets, enables them to offer a wider range of services than their public competitors. In some cases, well-known athletes and sporting personalities have lent their names to such enterprises. The pandemic has led many families and individuals to acquire a pet, to provide them with much-needed comfort and solace at home during successive lockdowns. Though most Brits probably still turn to their local kennels when they need to board their beloved pooch or moggy, there has been a remarkable growth in businesses offering such services as pet-sitting, grooming, “luxury hotels” for pets, and “living portraits.” We live in an ageing population. While senior citizens still tend to be looked after by their families elsewhere, their welfare is increasingly put in the hands of professional caring establishments in the west. With national and local governments unable to cope with the demand, franchising plays a growing role in this sector, and in hospital provision. Franchising is also seeing significant growth in the developing world and in emerging markets. As home markets may approach saturation point, ambitious operators will cast their eyes towards virgin territory. Eighty percent of the world’s population live in countries regarded as emerging markets. The US Department of Commerce estimates that, as growth stagnates in the developed world, these regions are likely to account for 75 percent of the growth in global trade over the next two decades. Franchisors must expect to face different challenges there. They need to consider carefully whether they are able and willing to tackle them. It’s been said that “franchising only works when franchisors get wealthy by helping their franchisees get wealthy.” In other words, the rewards and risks are mutual. Success isn’t a zero-sum game; everyone benefits. So what kind of person is likely to succeed as a franchisee? They should start by asking themselves certain key questions. Firstly, am I being true to myself? Do I know my own strengths and weaknesses? And do I know those of the sector in which I plan to operate? Is it still on the rise or has it already passed its zenith? Am I willing to take advice however unwelcome this may be? Is a franchise really the best way for me to operate in this sector? Provided they can give themselves clear-eyed answers to such questions, franchising can lead to abundant rewards.

The British Business Bank has revealed that, based on its estimates, smaller businesses account for almost a third (30%) of all current UK greenhouse gas emissions (including emissions from households, industry and government) and around half (50%) of total emissions from UK businesses. Its latest research report, Smaller businesses and the transition to net zero, highlights the potential collective influence of UK smaller businesses and the considerable contribution they could make to wider net zero objectives if they all made changes to reduce their carbon footprint. The report, one of the most in-depth so far in this under-explored part of the market, incorporates results from fresh data via a bespoke, nationally representative survey of 1,200 smaller businesses, and analysis of public data sources. Over three in four businesses (76%) are yet to implement comprehensive decarbonisation strategies, capabilities and actions, according to Bank estimates. One example of this is that just 3% of smaller businesses surveyed say they have measured their carbon footprint in the past five years and subsequently set an emissions reduction target. The early stages of transition There is limited proactivity from businesses to improve their own knowledge and capability, for example, with more than half (56%) in the survey saying they have taken no actions to change this. However, when asked about physical actions, it is encouraging to see that the vast majority (94%) say they have taken at least one action to reduce their emissions, though they tended to be low-effort ones, such as installing a smart meter. Overall, the most common motive for taking action, mentioned by just over half (51%) of businesses, was that it ‘made financial sense’, speaking to the need to align net zero and financial objectives for businesses in the transition. The data reveals around half (52%) of smaller UK businesses fall within the ‘Carbon Complacent’ or ‘Carbon Exposed’ personas established by the Bank based on business characteristics, emissions intensity, actions and attitudes. Businesses falling under these personas are reactive or simply disengaged in their attitudes to cutting emissions and have ‘low carbon transition maturity’. Awareness is mixed and attitudes split More than half (57%) of smaller businesses have heard a lot, or a fair amount, about the government’s commitment to reach ‘net zero’ emissions by 2050, and the implications of climate change for their businesses (56%), establishing a strong base for further transition. However, while nearly half (47%) of smaller businesses state reducing carbon emissions or environmental impacts is a high or very high priority over the next two years, 53% indicate they are not yet ready to prioritise decarbonisation. This split in attitudes demonstrates the need to raise awareness, balance the knowledge gap and ultimately help facilitate change. Barriers are multiple, complex and business specific   The research found that smaller businesses identified more than twenty barriers preventing action on net zero, demonstrating the complexity in addressing the issues on a wide scale and the need for tailored approaches. Some common themes have emerged, however – more than a third (35%) of smaller businesses cited costs as a barrier for reducing carbon emissions, particularly upfront capital costs (21%), followed by feasibility (32%), such as lack of control due to tenancy agreements or lack of an appropriate technology. Over one in ten (12%) said that lack of information was preventing them from action. Finance as an enabler to net zero transition So far, 11% of the smaller business population – equating to around 700,000 businesses in the UK – have accessed external finance, in the form of loans or equity, to support net zero actions. Looking forward, 22% of the UK smaller business population (equivalent to around 1.3 million businesses) – say they are prepared to access external finance to support net zero actions in the next five years. Catherine Lewis La Torre, CEO, British Business Bank, said: “Smaller businesses will generally have lower individual carbon footprints than their larger counterparts, but by broadening their vision and committing to action they can collectively produce a significant overall impact. “Action to mitigate the impacts of climate change is at tipping point, and it is crucial for smaller business owners to feel empowered, informed and supported in making the relevant steps to decarbonising their business if the UK is going to meet its wider net zero objectives by 2050. “More than half of smaller businesses say they’re not ready to prioritise decarbonisation, so clearly more needs to be done. “The Bank continues to strive to bridge the knowledge gap and work with its partners to improve smaller businesses’ access to the right finance to help them transition to net zero. We hope this report encourages business owners to review their business model, consider where changes can be made and to make the necessary investments to secure a sustainable future for their businesses.”