"Slumps offers opportunities, claims finance company; But firms must move fast to survive, adds Gambit partner"
Slump offers opportunities, claims finance company;
But firms must move fast to survive, adds Gambit partner
THE current economic slowdown will present opportunities for focused companies willing to embrace change, claims Frank Holmes, senior partner of Cardiff corporate finance firm, Gambit.
Mr Holmes, who has played an instrumental role in some of the biggest business deals in Wales in recent years, stressed that despite the challenging economic climate, some businesses will continue to succeed.
He said: "With the UK officially in recession with falling GDP, bank rate at its lowest ever rate of 1%, rising unemployment and an ever increasing number of companies facing administration, it is a critical time to move fast to survive.
He added: "Now is an opportune time to look at what your business does better than the competition, where it gains its competitive advantage, whether it is customer relations, cost efficiency, quality, technology or innovation, and to look at what attracts attention to your business and its uniqueness.
"It is in these areas that time, effort and resources need to be concentrated.
"On the flip side, it is also important to look at the business weaknesses and what competitors do better – this may result in considering the disposal of non-core operations, outsourcing certain functions and making improvements to those that are critical to the survival of the business, for example cost structures and tighter credit control to improve cash flow."
Mr Holmes said business owners still had to be focused on exit strategies.
"If now is not the time to transfer ownership, planning for when the time does come is vital and owners consistently underestimate the effort required to make this transition at an optimum time and return.
"Planning ahead requires consideration of objectives affecting all stakeholders from owners, managers, customers and key suppliers."
He said that market conditions were constantly changing and described timing in business as everything.
He added: "Businesses with strong survival instincts often have strong management, seek financial stability, sustain firstclass service provision and establish market-leading positions.
"These qualities generate strategic premiums for owners. Such people have focused on enhancing value through structured and driven transition plans The credit crunch, argues Mr Holmes, continues to be a major global issue and has resulted in the continued tightening of debt funding, which impacts on cash availability, pricing and banking covenants.
Mr Holmes joined Gambit in the autumn of 1995. At Gambit, he has led transactions ranging between pounds 2m and pounds 120m, including management buyouts, acquisitions and disposals.
Recent initiatives led by him include a two-year research project with the University of Cardiff Business School on Succession Planning.
His areas of expertise include healthcare, leisure, biotechnology, waste management and specialist engineering.