Welcome to Growthink’s Q4 2024 update. Below we will share:
- Growthink CEO Jay Turo on systemic risks businesses are facing in these uncertain times
- Chief Client Officer Anna Vitale on “business” problems versus “partner” problems
- Growthink Head of London Office Antonio Barzagli on the view from the UK and Europe
- Entrepreneurial Advisory Lead Bert Carder on the power of business focus and how to improve yours!
To all of our success!
The Downside
As entrepreneurs and executives, we are always balancing the mindset that yes we are fully responsible for our business success and struggles with…
…the statistical reality that economic and market conditions have a significant impact on the probability and timeline of our companies attaining their next level of success.
And, as these conditions evolve, so must our business tactics and strategies.
And whether we like it or not, we are all living and working in an era of more downside, systemic risk than perhaps ever before in any of our lifetimes.
These systemic risks are well known and include:
- Technological Obsolescence (aka AI)
- Cybersecurity (Malware, Ransomware, Data Vulnerabilities, etc.)
- Lawfare (Labor, Consumer, Regulatory / Governmental, etc.)
- Currency (aka $33 trillion in national debt growing at $1.5 trillion / year)
- Political / Geopolitical (Multiple flashpoints in a nuclear arms proliferating world)
Add these to the natural risks, uncertainties and competitive threats all businesses face (to say nothing of the personal health risks of the executives, many of whom are older), and more often now than ever, the future expected value of a lot of companies is decidedly negative.
I flag this not to fear monger, but to highlight our obligation to inform those in positions of business leadership to evaluate and make the best possible financial decisions for their companies and its stakeholders.
And way more often than far too many of these leaders recognize, if…
- A business can be sold for a very reasonable multiple, as little as 3-4 times earnings and…
- The proceeds of that sale can be invested on a tax-advantaged basis into a diversified portfolio of assets subject to far less of the systemic risks as listed above then…
…the financial math is quite straightforward: Sell.
Aka get out while you still can.
(Growthink Capital Advisors can calculate this math for your business. Contact them here).
To reiterate – this is not pessimism nor doomsday negativity. It is correct financial, mathematical advice.
Especially for those who have far more to lose on the downside than to realistically further gain on the upside.
Chief Client Officer Anna Vitale on “Are we solving for a business problem or a partner problem?”
Commonly, we’re approached by SMBs with a stated business problem: “How do we grow?” “How do we cut costs?” “We’d like to sell”. These are credible problems that management consultants and investment bankers were built to solve, and we love to tackle them.
We also know that the stated ‘business’ problem is often superficial, and that once we get into researching the best markets, putting together a data room, or building financial models, it’s common for a more fundamental problem to emerge. And that problem is about how partners or stakeholders are aligned—or not.
Maybe one partner is optimistic, pushing for rapid growth, while the other is more cautious, focused on creating a sustainable financial foundation. Or one is deeply committed to maintaining a full employee base, while another is eyeing the bottom line, ready to make tough cuts. And beyond these simple binaries lie board approvals, inter-divisional sacred cows, and even spousal and family dynamics.
This is the real stuff of business and life—value systems, goals, dreams and fears. Gaining alignment between stakeholders unlocks greater creativity, motivation, and collaboration toward the success of solving the business problem.
As advisors, our team approaches these deeper dynamics with care, knowing when to push for alignment and when to let the data, research, and strategy guide stakeholders toward a shared vision.
Learn more about Growthink’s FP&A services here.
Growthink Head of London Office Antonio Barzagli on The View from the UK and Europe
Current Business Trends and Themes
As we move through Q4 2024, business sentiment in the UK and Europe remains cautiously optimistic, buoyed by stabilizing inflation and encouraging growth forecasts. The UK economy is projected to grow by 1.1% in 2024, and further growth in household consumption is expected as inflation cools. In the Eurozone, GDP is projected to grow by 0.4% in Q4, driven by increased household consumption and improving labor markets. Notably, inflation rates have eased, with the UK’s core CPI dropping to 4.2% and the Eurozone’s to 2.7%, which could prompt interest rate cuts in early 2025.
Digital transformation continues to lead the way, as companies increasingly invest in AI and cybersecurity to enhance operational efficiency. Sustainability is another key focus, as companies ramp up ESG initiatives to meet both regulatory requirements and consumer demand for greener solutions. With a growing emphasis on upskilling and reskilling, particularly in technology, businesses are adapting to the evolving labor market while maintaining cautious optimism about future consumer demand.
Emerging Sectors and Niches to Watch
Several emerging sectors are positioned for significant growth. Lithium battery manufacturing is experiencing rapid expansion, with the UK seeing a projected revenue increase of 58.9% in 2024 due to strong government support for electric vehicle production. Meanwhile, climate tech investments totaled $11.3 billion in the first half of the year, highlighting the sector’s long-term growth potential as global sustainability goals accelerate.
Other underexplored opportunities include silver tech, addressing Europe’s aging population with health and financial management technologies, and decentralized finance (DeFi), where tokenization of real-world assets like real estate is unlocking new liquidity streams. These niches present substantial opportunities for forward-thinking businesses as the region continues its digital and green transition.
To explore capital raising or M&A opportunities for your business please get in touch by completing this form or calling us at (213) 927-3968.
Securities transactions are conducted through GT Securities, Inc. Member FINRA/SIPC. Nothing in this email should be regarded as an offer to sell or a solicitation of an offer to buy any Investment.
Entrepreneurial Advisory Practice Lead Bert Carder looks at the Power of Focus, and shares a few techniques for improving yours.
Lately, I have been speaking to C-Suite Executives who are chasing multiple strategies for many of their #1 priorities. I usually remind them, you can only have one #1 priority today, and then ask them “what is yours?” It takes a few back and forth discussions before they get to the actual #1 and identify that the others are not #1, which leads us to a chat on the Power of Focus.
Our conversations usually include these observations:
- BE VISIONARY: Ask yourself, what will be the most important thing I work on today and if I asked myself this in 5 years, would I have the same answer.
- PROTECT YOUR TIME: Prioritize your day each morning, making sure that there is appropriate time on your calendar to work on tasks for #1.
- REMOVE DISTRACTIONS: Turn off your phone and email for 50 minutes and work with greater focus. The quality of your decisions will improve with undivided attention and focus
As Bruce Lee famously said, “The successful warrior is the average man, with laser-like focus.”
If you have questions or need support, Growthink has a team of business experts who can work alongside you to develop strategies and solutions to address these types of challenges and help you put together a strategy and execution plan. Learn more here.
Contact us to schedule a complimentary discovery call.
