Grow or prune?
Today, 61% of Belgian companies are planning their growth. They see growth potential mainly in building upon the current business and team (42%). They also place a high value on innovation (29%), plans for expansion into new markets (25%), and acquisitions (17%).
But our companies also face a host of challenges in doing so. The major ones are finding suitable staff (40% in top 5), the volatile economic context (35%), setting up structures and processes (33%), and the energy crisis (30%). Peter Van Laer explains, “Our companies continue to struggle with inflation and their structural costs are increasing. But they have fewer weapons in the fight against those financial pressures. Whereas, for example, they could previously partly absorb these with price increases, there is virtually no support for this now.”
In addition to the companies with growth plans, 10% are also thinking of downsizing or even going out of business. These are mainly self-employed people without permanent staff (14%) and companies with 1 to 5 employees (20%).
Investment plans
46% of planned investments frame a broader strategic plan. For almost as many companies (42%), however, these are more likely to be ‘forced’ investments from an acute need or in the context of an unmissable opportunity.
This year, our companies will mainly invest in further building their corporate brand (33%), hiring additional staff to meet demand (31%), further digitalisation (28%), additional staff as part of a new strategy or offering (27%), and green energy (24%). For the coming years, that investment focus will be largely similar.
Those growth plans naturally go hand in hand with investment. About half of the companies anticipate investing more than 100,000 euros. And the smaller players are stepping up here, too. Similarly, 40% of SMEs with fewer than 20 employees plan to invest such amounts. The planned investments are mainly financed with own capital (57%) from its own cash flows or through banks (31%).
Ready for the future? Yes, but…
Four in ten (43%) surveyed see the future with confidence and think the worst challenges are behind them. Almost half (49%) then also believe that their company is robust enough to withstand any new economic shocks.
Managers state that finding the right people (52%), innovation capacity (46%), and finding the right partners (39%) are the most important factors for the future success of their company.
Finally, the vision of the future often involves a changing of the guard. For example, 35% foresee a business transfer within five years. For 14%, it is about the next generation taking over, 13% are looking at an acquirer, and 8% see a management buyout as the future scenario. Peter Van Laer continues, “It is encouraging that our companies are showing such foresight. The success of a business transfer is largely determined by good, longer-term planning. For a transfer to the next generation, we are easily talking about a trajectory of five to even ten years, anyway. Even when looking at an external acquirer, it is important to provide sufficient time. Especially if the company structure has to be changed to attract more potential acquirers. Surely such a process could then also take six months to a year. But that investment of time and effort results in a higher success rate and a better valuation of the business.”