2015 is going to be a fantastic year for some individuals in this industry. Big corporates’ profits are falling and their fixed costs are huge. Business leaders are struggling to rise to the challenge. Internal communications may be absent or demotivating. Control predictably will become more centralised at HQ. Local service standards will be under pressure. Entrepreneurial middle managers want better for themselves, their teams and their customers. Opportunity knocks.
When budgets are cut without differentiation (let alone consultation), and jobs appear vulnerable (notwithstanding the percentages shed are actually tiny) entrepreneurs sense an opportunity. The market may shrink but that doesn’t mean there is not room for new suppliers. Customers’ profits are under pressure too. They want cost savings. They want innovation. They want added value. Their loyalties are with individuals. People buy from people.
We like an underdog, particularly one that we have worked with for years, is light on their feet and who can now offer more for less.
Some middle managers will get the head-start of a redundancy payment, some won’t want to wait that long. Their customers are crying out for service, innovation, need help now and are willing to pay for it. Poor morale and corporate dissatisfaction means the entrepreneur taking his team with him should be easier than ever. Everyone wants to work for a rapidly growing business- and that’s so much easier with a start up!
The advisory community is standing by for the shake out. Enterprise North East Trust have just opened their Aberdeen Centre for Entrepreneurship (good timing to catch the wave). Us lawyers are standing by with our ready-made Newco’s, shareholders agreements and intellectual property advice.
This is a wake-up call for big business too. Whilst HR teams may be pre-occupied with redundancy consultations someone needs to focus on making sure they have a full set of signed employment contracts. From the employer’s perspective hopefully they contain enforceable restrictive covenants and confidentiality clauses. Sent the contracts out but never got them back?
A familiar story. Five acquisitions and two TUPE transfers in three years and a bit behind on the paperwork? Get some help now. Aberdeen is already our national capital for dawn raids- departed employees being chased for the return of their employers’ intellectual property. Lucrative business for us lawyers, but if employers’ processes were a little more slick then maybe errant employees wouldn’t try it on in the first place. Competition is fair game, but only as long as it is honest competition.
Whilst we cheer on entrepreneurs don’t forget our pension funds are invested in big business. The smart ones will embrace entrepreneurship from within. How did the five acquisitions grow before they were bought over? Are the people still there? How can they be empowered and incentivised to make sure at least some of their energy remains after the deal? Risk reward sharing? Joint ventures? Spin-outs?
There are new business structures out there for all those that ask. Seize the day.
* Peter Murray is a partner at Scottish law firm Ledingham Chalmers where he specialises in UK corporate law and international projects.