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Reconomy, a leading supplier of sustainable waste management solutions, explores how the younger generations are influencing businesses to be more environmentally conscious and how businesses can lead the way for a brighter tomorrow.  

What does Gen Z think?

The increasing interest in sustainability has created a space for young people to campaign for continued action against climate change. And thanks to the powerhouse voices of Greta Thunberg, Vanessa Nakate, and Mya-Rose Craig, Gen Z has become the generation of sustainable activists.

According to a survey by Bupa, 63% of Gen Z and millennial respondents reported feeling the burden of climate change, compared to only 37% of Gen X and 28% of baby boomers. This could be a result of powerful media coverage that has raised awareness of the damage being caused by our behaviour. Firstly, Blue Planet in 2017, then the WWF advert ‘Fight for Your World’, which resonated deeply with many, stating that this is the first generation to know that we are destroying the world and the last to do anything about it.

These values have gone on to influence the individual behaviours of older generations. And, according to a survey conducted by Deloitte, 39% of adults reduced the number of new goods they bought between 2020-2021 as a result of the values of Gen Z and millennials.

How has this affected businesses?

Individual behaviours cannot be solely responsible for reversing the negative effects of global warming. As a result, people are looking beyond individual factors by holding businesses and governments responsible for national and global carbon footprints.

34% actively chose to buy from sustainable brands between 2020-2021. But how do consumers know which brands are sustainable?

Marketing campaigns can be utilised to showcase sustainable products or services. This presents brands as desirable to Gen Z and millennials. However, actions speak louder than words, and delivering results is proving to be just as important as marketing. Sustainability within businesses is itself changing. The commercial landscape for companies is evolving and moving away from a consumptive capitalism approach towards a more regenerative form. Businesses that fail to adapt are likely to face extinction.

The shift in consumer behaviours has also encouraged the growth of the green economy, which was reportedly worth £205.76 billion in 2021. This includes over 75,000 low-carbon businesses, such as recycling plants and wind turbine manufacturers, that prioritise the environment and employ over 1.2 million people across the nation.

How can businesses tackle climate change?

More often than not, businesses are taking steps to become more sustainable. On the other hand, sometimes companies are stuck on a transitional path, stalled by individual cost centres that are preventing holistic decision-making.

This can often lead to departments making polarising decisions based on the way that their business runs. In these circumstances, companies fail to recognise the full scope of their resource cycle and all of the benefits that come with having a varied approach.

To achieve meaningful progress, businesses should successfully implement sustainable waste management solutions into their culture, structure, and strategy. This might not be implemented straight away for some, although from a procurement perspective, they should be able to make decisions that have a lasting impact on the entire organisation.

This has been a challenge for some businesses until recently, as each unit would procure for their own requirement, and there were not as many comprehensive solutions that could consider the whole resource cycle.

Overall, there’s no doubt that sustainability is taking centre stage. Baby boomers and millennials have paved the way for Gen Z to campaign for current concerns surrounding the speed of climate change. In turn, businesses are being held accountable for their actions, fuelling hope for a future free from the negative effects of global warming.

Sources                   
https://internetretailing.net/sustainability/sustainability/a-third-of-uk-shoppers-demand-greener-products--and-will-pay-more-for-them-22190

https://www.glamourmagazine.co.uk/gallery/gen-z-climate-activists

https://www.bupa.com/news/press-releases/2022/gen-z-seek-ethical-workplaces-as-environ-mental-health-burden-bites

https://www2.deloitte.com/uk/en/pages/press-releases/articles/four-out-of-five-uk-consumers-adopt-more-sustainable-lifestyle-choices-during-covid-19-pandemic.html

https://www.prca.org.uk/Reaching-Millennials-and-Generation-Z-with-Purpose

https://www.bbc.com/future/article/20211105-how-carbon-might-go-out-of-fashion

https://www.theguardian.com/business/2022/jan/14/dirty-greenwashing-watchdog-targets-fashion-brands-over-misleading-claims

https://www.theguardian.com/environment/2021/aug/10/uks-green-economy-four-times-larger-than-manufacturing-sector-says-report

https://www.countryandtownhouse.com/travel/does-carbon-offsetting-actually-work/

Flexibility and adaptability are core beliefs in his work. His successes have come in large part due to his ability to identify concepts that will transform markets. The companies he’s built – from ride-sharing businesses to sunglasses and eyewear brands – have benefitted from this mindset. As he continues to build his business portfolio, the beliefs will persist in guiding his work. 

“I believe that you have to understand that the world is changing so fast,” he said. “The markets, the appetites, the cultures -- everything changes.”

Alejandro Betancourt has used that ability to identify change and anticipate what it means for markets and consumers to develop an impressive array of business achievements.

Auro Travel Advances Ride Sharing In Spain

Betancourt is the founder and largest shareholder of Auro Travel, a Spain-based ride-sharing company. Betancourt founded the company after seeing an opportunity to compete with similar companies like Cabify and Uber. Spain requires such companies to have vehicle licenses to operate. The company aggressively began acquiring the licenses, which are in limited supply.

The company, founded in 2017, today has about 2,000 licenses, mostly in Madrid. It is the largest provider of private car services with drivers in Spain. 

While the move was perceived to be risky at first, the strategy has paid off. Auro Travel developed a division, Arrow, which licenses the licenses to other ride-sharing companies seeking to operate in major Spanish cities.

Betancourt takes a hands-on approach to the companies in which he invests or creates. At Auro Travel, for example, he is fully involved in strategic planning, selection of key management leaders, and the creation, testing, marketing and launch of the company’s mobile app.

Betancourt believes the ride-sharing industry will continue to evolve and grow, noting that several of the companies are now branching out into areas such as food delivery. With the fierce competition for market share in the industry, he believes there will be contraction eventually.  

A Career In Varied Industries

Alejandro Betancourt attended Suffolk University in Boston, graduating with a double major in international economics and business administration. He started his career working for Guruceaga Group as a new business manager for the international trade company. He later served as a director of trading and an executive trader for ICC-OEOC, an oil and gas company.

He served as a director of two energy companies. At BGB Energy, the Venezuelan affiliate of Kawasaki Heavy Industries, he oversaw sales origination throughout the country and was responsible for 13 turbines. He later served as a director of Pacific Exploration & Production Corp., a Canadian public company with operations throughout Latin America.

In 2012, Alejandro Betancourt joined O’Hara Administration. Today, he is the director and a controlling party of the asset management and investment firm. He oversees the firm’s fund-raising and investment strategies, working with European banks and institutional investors. He is the firm’s largest shareholder in private equity investments in technology, banking and oil and gas companies.

Bright Future For Hawkers

Hawkers began as a $300 investment by four friends, who bought 27 pairs of American sunglasses made by Knockaround. Reselling the sunglasses proved to be an instant success. The founders decided there was a market for affordable, high-quality sunglasses with a modest price point -- $20 to $40 at the time. A Kickstarter campaign netted them nearly €190,000 and Hawkers began offering a range of colours, frames and lenses.

The founders, however, faced operational and logistics hurdles that had led to shipping delays and frustrated customers. 

Alejandro Betancourt saw the potential in the young company. He and a group of investors put up €50 million for the eyewear company. In November 2016, Betancourt was appointed as company president for Hawkers

In 2018, Betancourt made an additional investment of €20 million. Today, he is Hawkers’ largest individual shareholder.

Betancourt used several innovative marketing strategies to grow Hawkers to the third-largest sunglasses brand worldwide. He relied heavily on social media and influencer marketing to begin using well-known web stars to tout the product. Hawkers gave the influencers free sunglasses along with promo codes they could share with their followers.

Betancourt also began using celebrities and signed promotional deals. Ford, Kia, Mercedes-Benz, PayPal, PlayStation and Smart are among the companies Hawkers partnered with. In addition, the company signed a marketing agreement with the NBA’s Los Angeles Lakers. Celebrity partners included Steve Aoki, Lionel Messi, Ricky Rubio and Usher. 

Betancourt also launched a campus brand ambassadors program that has recruited 5,000 college students to date. The ambassadors, chosen due to their wide social media followings, host events on behalf of Hawkers in exchange for trips and festival and concert tickets.

Today, the brand has expanded across Europe to Asia, Australia and North America. For Betancourt, success is a never-ending pursuit. 

“Everybody wants success. Everybody's looking for success,” he said. “It’s a continuous pursuit of trying to achieve your different goals, which keep evolving. As long as you are in that race to continue to pursue them, you are on the road to being successful.”

The last time inflation was this high – in the early 1980s – Margaret Thatcher had been prime minister for two years. Channel 4 had just launched, and if you were aware of inflation at all, it was probably because the Wham! cassette you wanted to buy at HMV was a pound more than you expected.

Since then, inflation has rarely exceeded 4%. Generations of British and European finance professionals have spent whole careers making forecasts – where inputs and outputs were relatively stable most of the time. But that’s over now. Today, with Sterling and Euro zones’ inflation already running above 7.5% and no cooling in sight, monetary stability seems to be something else we lost during the pandemic – and adapting to this new reality is now a concern for chief financial officers (CFOs) and finance transformation leaders. 

What should you keep in mind?

This is a crisis with your name on it

The 2020s aren’t the 1970s reloaded. For CFOs and other finance leaders, managing this round of inflationary times is likely to be even more challenging.

The reason is that today’s CFOs have a broader mandate to help shape corporate strategy, supply chain resilience, pricing and procurement, as well as maintain a keen interest in the level of staff attrition in the business. As a finance leader, you may well be positioned to understand what is happening, but have you considered how finance should partner differently with the rest of the business?

Inflation is a five-alarm fire

Inflation will affect your firm, your employees, and your shareholders – but not everybody will be attuned to the dangers, and many may be underestimating the toxic effect of stagflation (i.e., inflation without growth). Your first job will be to convince everyone that mitigating its impact is a high priority. Unless your financial modelling capabilities are ready to simulate the limit of passing on any price increase to customers and contain input price hikes, inflation may not just hurt margins for a quarter or two, it may hurt your company’s profits and prospects longer term. Whether the challenge is procurement, outsourcing, pricing or hiring, you need a finance transformation and continuous improvement strategy, and that strategy should be executed based on proven best practices.

Prices and costs are moving targets

The costs of labour, materials, transportation, energy and other expenses are all increasing, but not necessarily at the same rate. To handle inflation, you will need a deep sense of the moving parts of your cost structure – particularly if a period of stagflation ensues and the growth slowdown limits your ability to raise prices. Enterprise-wide, too, it’s important to remember that inflation affects different businesses differently. Organisations in the hospitality business may be very concerned with foreign exchange risk, while industrial manufacturing organisations will likely be worrying more about the cost of raw materials and logistics. It goes without saying, of course, that working capital management will need even more emphasis. If you need to cut costs, do it intelligently. Benchmark your costs to look for opportunities and take another look at the benefits of digital transformation, which many companies today are finding to be a highly effective way to scale capabilities while reducing expenses.

The most valuable people in your team may be revising their CVs

In a very real way, inflation is a pay cut for your staff. If you don’t make it worth their while to stay, your best employees will leave. Keep this in mind as you draw up your own hiring and retention plan. Replacing finance professionals will be expensive, particularly because for many firms, proactive inflation management will require hiring more analysts. The shortage may turn out to be quite serious: we know of one company that is expanding its planning and analysis team by 40% and doubling its indirect sourcing and procurement staff so it can handle the added workload generated by additional price and cost modelling and more frequent contract reviews.

Refocusing the services of the finance business partners becomes paramount

Unfortunately, for many finance organisations, the activities of the finance business partners supporting management decisions may still be consumed by the wrong types of activities and priorities. High-performing organisations are instead revisiting the role that finance should play to help adapt the enterprise to this new reality, focusing on important questions: What is the breaking point where price increases begin to adversely impact demand across your products, services and channels? How much inventory are you willing to carry as warehousing costs increase? What is your exposure to rising interest rate differentials? How do you balance working capital management with the need to satisfy customer demands? What is your optimum cash position to take advantage of discount opportunities? What is your supplier credit risk? Do you understand the working capital drag created by the increasing cost of capital on our overall profitability?

The increasingly strategic role that the finance function plays in high-performing companies over the last decade gives legitimacy to the evolving role of finance. For instance, we foresee an enduring role for finance professionals in educating and coaching other leaders in navigating this challenging environment. This role will be supported by the unmatched analytic insight – an understanding of how the company’s value chain fits together, including research and development, commercial operations, and other enabling functions. As challenging as the rest of the 2020s may be for the prepared finance executive, they are also likely to be years of extraordinary opportunity. 

About the author: Gilles Bonelli is an Associate Principal at The Hackett Group’s Finance, Enterprise Performance and Business Intelligence Advisory Practice in Europe. 

Climate crisis: a year in review 

When we reflect on the year just gone by, it remains clear that the world is still not taking the steps it needs to prevent and mitigate climate change. The worrying symptoms of the crisis are being felt across the world, from torrential rainfall in Malaysia to wildfires ravaging the mountains of Greece. The evidence is incontrovertible. Despite the devastation caused by climate change, political and business leaders have been working to turn the tide on the crisis. The three reports released by the IPCC throughout 2021 and into 2022 have all been clear - we all must play a part in tackling the crisis. Just recently, the IPCC released their starkest warning yet, which suggested that we were reaching a point of no return and that if we are to stave off the worst effects of climate change, we would need to significantly strengthen existing targets.

2021 was a big year for climate action, which is the result of an established trend in which climate change has become part of the public consciousness. Each year more people are recognising the devastating effects of climate change – according to a study in the Lancet, for example, more than 60% of young people are 'extremely concerned about climate change'. Alongside an increase in a public outcry for climate change, 2021’s long-anticipated COP26 summit also struck a chord with the public  – with commitments made by world leaders being criticised for not going far enough.

However, it would be remiss to ignore the important steps international leaders made to help achieve our shared objective of keeping the planet's warming below 1.5C. For example, 153 countries strengthened existing or made new emissions targets; 137 countries pledged to end deforestation by 2030, and more than 100 countries have committed to reducing methane emissions by 30% by 2030. While further action is needed, the work achieved in Glasgow has kept the 1.5C goal alive.

Encouraging corporate decarbonisation: time to change tactics?

Now that political leaders have come together to double down on decarbonisation targets, the time has come for public authorities to design bold policies to tackle climate change. At the same time, businesses have a crucial role to play in decarbonising as fast as possible to prevent global warming and stay relevant. Many companies are already rising to the challenge. For example, in March of 2021, 30 of the UK's biggest companies signed up to the United Nations Race to Zero campaign and many have been making good on their commitments. For example, both BT and Vodafone reached their goal of powering 100% of their UK network by renewable sources, while AstraZeneca more than halved their greenhouse gas emissions (scope 1 and 2).

However, while more than 1,000 companies, including 82 Global Fortune 500 companies, have announced Net Zero targets, committing to ambitious goals is far from enough to accomplish a meaningful sustainability transformation and a significant reduction in global emissions. There is great momentum in setting targets but achieving Net Zero implies a transformation journey far beyond the incremental change most companies are accustomed to.

Engie Impact’s own research shows that while several companies have set goals, few have proposed a detailed strategy to reach them. I don’t believe that the lack of planning and foresight is a reflection of their attitude to climate change. It instead highlights the complexity of overhauling the existing setup. It is, undoubtedly, a huge challenge, but businesses must not bury their heads in the sand. Technology, skills and knowledge on sustainability are available and advancing rapidly – it's in a business’s best interests to adopt them and tackle climate change head-on.

To encourage businesses to design and implement effective decarbonisation strategies, we must look beyond the method of attempting to force companies to change through government legislation. The recent introduction of mandatory climate risk reporting in April should inspire more companies to get their sustainability house in order. The regulatory pressure will only increase.

However, while new regulations are essential, they are not a silver bullet, so companies must recognise the tremendous value in introducing sustainable business practices. Ultimately, it is in their best interests to invest in sustainability transformation. Those companies that engage in sustainability transformation will improve their bottom line as they reduce costs, by consuming less, unlock new revenue streams, retain and attract the best talent, create a competitive advantage compared to their peers, increase client loyalty, be financed through cheaper capital etc. And on top, they will help mitigate the effects of climate change.

Looking back … and forward 

Since the last Earth Day, the spotlight on climate change has gained further momentum, with more of the world's largest companies announcing ambitious Net Zero targets and investing in their sustainability transformation. Meeting these targets will not be easy, but the good news is that investing in sustainability has become cheaper, with companies now able to take advantage of funds allocated for sustainable projects and a significant reduction in the cost of technologies. These changes have also coincided with advancements in sustainability digital platforms to enable a seamless transformation at enterprise scale. Businesses can now leverage data to simulate precisely how much carbon they can reduce by implementing new internal processes, saving time and enabling companies to expedite their journey to Net Zero.

Sustainability transformation is not a choice, it is a business imperative. Companies that refuse to invest in sustainability transformation will quickly become irrelevant as consumers opt for their greener competitors. While Earth Day continues to shine a positive spotlight on sustainability each year, the fight against climate change is happening every second of every hour. We still have a chance to win the battle, but the time is NOW.

 

Mathias Lelievre is the CEO of ENGIE Impact.

However, while 59% of business leaders reported having a “zero-tolerance” policy towards racism, only 18% of employees claim their leaders have openly acknowledged existing inequities – according to new research by Henley Business School.

With more than 3 out of 4 job seekers and employees (76%) reporting that a diverse workforce is an important factor when evaluating companies and job offers, it is clear that companies need to champion diversity and inclusion because it is morally right and also because it is important for business success.

Deborah Gray outlines some key tips to help a business design a recruitment strategy that attracts a broader range of talented individuals while expressing the firm’s commitment to its values.

Make your adverts inclusive

The latest research from LinkedIn suggests that while both genders browse jobs online in a similar way, they apply for them differently. More importantly, the study found that male-orientated job descriptions, can actively dissuade women from applying to jobs, and this is particularly prevalent within the tech sector.

As a result, employers should avoid the temptation of recycling an old advert from previous years and deploy gender-neutral language in their communication. Therefore, it’s essential that the language used in job adverts is inclusive, avoiding nuanced biases and avoiding blanket terms such as ‘team player’ or ‘charismatic’ in favour of accurate descriptions of competency.

Equally, firms need to avoid using jargon that might be deemed unnecessary – phrases such as KPIs, SLAs and P&L. While potential recruits with experience may well understand these acronyms, talented young people, particularly those coming straight from university, may be less aware of these terms and corporate jargon.

Firms should only include skills that are immediately vital, while clearly expressing their commitment to improving diversity. It is also important to constantly review applicant demographics to continually monitor when adverts might be discouraging applicants.

Don’t let biases go unchecked in the interview process

Unconscious bias goes some way to explain why many cross sections of society are underrepresented in senior management teams and boardrooms. For example, a study from researchers at Nuffield College’s Centre for Social Investigation in 2019, which altered nothing but applicant names that were based on their ethnic background, found that while 24% of white British applicants received a call back from UK employers, just 15% of ethnic minority applicants did.[1]

Moreover, compared to White British applicants, people of minority heritage had to make a considerably higher number of job applications before getting a positive response, including those from Pakistan (70%); Nigeria and South Asia (80%); Middle East and North Africa (90%).[2]

It is important to also be wary of unconscious gender bias when screening candidates. Unfortunately, gender bias in hiring persists today, with a recent UN report finding that almost 90% of men and women hold some sort of bias against women and a look at the FTSE 100 showing that there are more CEOs/chairmen called John than there are women.[3] Just 10% of executive-level roles in the tech industry were held by women in 2020 – highlighting that there is still a clear need for change.[4]

Interestingly, a 2016 Harvard Study found that employers who interviewed candidates in a group setting were far more likely to eliminate any gender biases inherent in an individualised hiring process.[5] More diverse representation will help workers feel better accepted and therefore more confident in entering different sectors. Hiring more women into senior leadership roles will positively influence younger female workers, helping them to aspire to similar roles in the future.

Asking candidates about their interests and working styles during interviews may offer useful insight, but this can also foster biases. Therefore, rather than job suitability, interviews often end up testing similarity between candidates and current employees – this can be problematic in workplaces that lack diversity.

In addition, companies should have multiple decision-makers involved in the hiring process. This way, varying notes and scores can be compared and reviewed, which will often reveal a candidate’s suitability more effectively.

Target a variety of sources for diverse candidates

Instead of relying on the same tried and tested talent pools, employers should seek out new sources focussing on a variety of different institutions, universities, cities or regions. As an example, there are many groups online, such as the women in business network or the black business network, which could provide opportunities for businesses to hire a more diverse group of new recruits.

Find an external recruiter that shares your values and commitment

It is often the case that businesses look to specialist recruitment firms to find suitable candidates.  Specialist firms often have a deep understanding of how to encourage and foster diversity and inclusion through the hiring process. These firms can often point out problem areas within the hiring approach for businesses where diverse candidates might be disadvantaged or where there is potential for bias.

Totum Partners adheres to recruitment practices that find, foster and forward candidates from a diverse pool of talented individuals from a variety of backgrounds and demographics. Not only are companies with a diverse range of recruits seeing 2.3 times higher cashflows than those with less diverse teams, but they are also 70% more likely to capture new markets than their counterparts. However, much more importantly, increasing diversity and inclusion is just the right thing for businesses to do. Providing all candidates with a fair chance, free from bias or discrimination is at the top of Totum’s agenda – those who do not adapt to encourage D&I will find themselves short of the top talent that drives business success.

[1] http://csi.nuff.ox.ac.uk/?p=1299

[2] https://www.bbc.co.uk/news/uk-46927417

[3] https://www.beapplied.com/post/gender-bias-in-hiring-report

[4] https://isemag.com/2020/10/telecom-the-latest-stats-on-women-in-tech/#:~:text=According%20to%20a%20report%20by%20Entelo%2C%20there%20are%20about%2019,10%25%20of%20executive%20level%20positions.

[5] https://dash.harvard.edu/bitstream/handle/1/8506867/RWP12-009-Bohnet.pdf?sequence=1

Considering the current environment, is now a good time to sell a business? 

In the industries that we typically work in (waste, recycling, trucking, logistics, food service, contracting), the M&A activity is off the charts right now. Given rising inflation, labour shortages and the escalating situation in Ukraine, if you are even on the fence about whether or not you want to sell your business, I would advise you to take a serious look at your exit options. On top of all that, the Federal Reserve is planning multiple rate increases this year. Given that, as well as the economic and geopolitical issues facing the United States and the world, there is no telling what the capital markets could look like a year from now. A deal that requires any sort of financing may be difficult to achieve 12 months from now. In short, I do believe it is a good time to sell your business, especially if you are a closely held business. There are quite a few industries right now that are being aggressively consolidated and valuations are very high. This is absolutely a great time to sell, but if you are serious about doing so, I would start the process right now. The last two years have shown us how rapidly things can change, and I would not be surprised if 2023 looks a lot different than 2022.

What are your top tips on planning an exit?

The number one tip I could give anyone who is trying to sell their business would be to stay organised and have all your information accurate and up to date. I am helping a closely-held family business sell right now. On top of being great people, they have also run their business exceptionally well. In a matter of a week, they were able to provide me with audited financials, tax returns, asset lists, customers by revenue, large contracts, etc. I could tell right away that their information was accurate and that I could trust it. When I am negotiating with buyers, it is a huge advantage to know that what I am selling is accurate and that I will not get a surprise right before closing that results in the owner taking a haircut.

The next tip I would give to anyone considering selling their business is to explore getting a quality of earnings (QoE) done. Every deal I have been involved with, whether it is getting a commercial loan for a client or helping someone sell their business, has involved one of the parties getting a QoE done. A QoE is a “mini audit” that is not as long or costly as a full audit, but it gives instant credibility to the financials that a company provides.

Unless the situation in Eastern Europe escalates even more than it already has, I expect the M&A activity to continue to be busy, at least in the short term.

My next tip would be to check your expectations going into any deal. Your business is not worth what you think it is, it is worth what the highest bidder is willing to pay. We have met numerous owners who have unrealistic expectations about what their business is worth and it can ultimately cost you value. At my old job, I was leading the acquisition of one of our local competitors. We offered him $3.5MM for his business, he wanted $5MM. We ultimately walked away from the deal. Over the course of two years, he lost a few big contracts, had a couple of trucks breakdown, and a key employee left. Just two years after our initial offer, we bought him for $1.2m. You should absolutely get what your business is worth and fight for it, but also remember that it is not you the business owner who ultimately decides how much your business will sell for -it is whoever is willing to pay the most.

Finally, continue to run the business as if the deal will not go through and you are going to run your company for the rest of your life. Until all the documents have been signed and the money is in your bank account, a million different things could happen that could derail the deal.  I have seen many business owners think they are going to close on selling their company then begin to neglect the day-to-day operations of the business. In the instances where the deal falls through, I have seen those business owners in some unpleasant situations. No matter your exit strategy, it is pertinent to continue to maintain the standards of your company.

What M&A trends do you expect to see in the coming months? 

Unless the situation in Eastern Europe escalates even more than it already has, I expect the M&A activity to continue to be busy, at least in the short term. It is possible that it will be a down year for the stock market with rate hikes coming and fixed income securities currently have historically low returns. For financial buyers, especially PE firms, buying companies is the most logical step to earn points on your money. I would expect financial buyers, especially PE firms, to continue to be aggressive in the coming months.

About Michael Cifor

Tangram Partners offers four “core” services. It provides business valuation (BV) services, M&A advisory, debt and equity raising and corporate restructuring. In his role at Tangram Partners, Michael is the primary lead on all of their BV projects as well as support management with other services. During his time at Tangram, he has performed  numerous valuations for cases that included divorce proceedings, succession planning, wills and estates and shareholder disputes. On top of his BV work, he has put together three separate syndicated commercial credit facilities totalling over $100m, executed two mergers and one acquisition and is currently in the process of helping a close-held, family business sell. 

Tangram is currently engaged with several commercial banks to work out projects where they help businesses that have defaulted on their loans to get back in compliance. While located in upstate New York, the company works nationally with current clients in California, Georgia, Florida, Massachusetts and Michigan.  

The Public Accounts Committee (PAC) report warns that there could be “potential disruption” at the UK border if cross-border passenger volumes, which have been at a fraction of normal levels due to the pandemic, recover as expected in 2022. 

This could be “exacerbated by further checks at ports as part of the EU’s new Entry and Exit system and especially at ports like Dover where EU officials carry out border checks on the UK side,” the PAC’s report says

The PAC has repeatedly raised concerns about the impact of changes to trading arrangements on businesses of all sizes and we remain concerned.”

Since the end of the agreed transition period on 31 December 2020, there have been a series of changes in how the UK trades with the EU, and in relation to the movement of goods between the UK and Northern Ireland. 

This has led to the EU introducing full import controls. While the UK had initially intended to follow suit, the implementation of such controls has been delayed by the government three times over the past year. 

Government plans to create the most effective border in the world by 2025 is a noteworthy ambition but it is optimistic, given where things stand today,” The PAC says, moving on to comment that it is “not convinced that it’s underpinned by the plan to deliver it.”

At the same time, nothing stops you from retraining and pursuing a career in an industry that is beginning to take off. Emerging industries have always been a thing, and the new industries are often popular with existing and budding entrepreneurs alike.

Knowing what these industries are is the critical first step, and that is where we come into the picture. Below, you will find a list of some emerging industries that have dominated the business scene for the past few years and which look set to remain. 

Regardless of what industry you are looking to move from or into, read on to discover more about these industries, as well as a bit about what you can do to be successful in your upcoming career switch. 

What Is An Emerging Industry?

Before getting into the swing of things, let’s take it back to basics. For those who are unsure, Investopedia defines an emerging industry as when a product or idea is in the early stages of development, and numerous companies focus themselves on this idea. Generally speaking, this happens when a new form of technology is discovered or created, replacing an older counterpart. 

As you might have grasped following from this definition, there have been numerous emerging industries throughout the last few decades, running alongside the numerous technological advancements that we have seen. These include the following industries: 

1. Artificial Intelligence (AI)

AI is something that is becoming all the more commonplace but is a phenomenon that is still confusing a lot of people. The technology that is used for this emerging industry is continuing to develop and grow and is being used more in our day-to-day lives than ever before. While some might find this form of technology problematic, it has proven to be incredibly helpful to numerous industries. 

Various industries and businesses use this emerging technology; it is even used by some government departments here in the United States. There are numerous jobs available in this emerging industry, and they can be attained by learning the associated skills that often link closely with computer science as a field. 

2. Fintech

The running theme throughout this piece will be that most emerging industries relate to the likes of technology in some way or another. Fintech, also known as Financial Technology, is the process of competing with or replacing more traditional methods of delivering financial services with a form of technology. Much like other forms of technology, this is something that is continuing to grow and develop while also revolutionising the ways that we complete tasks. As a result, there is always something new to learn about this emerging industry. 

Fintech courses online allow interested parties to learn more about this form of technology while retaining their existing skills in the hope of moving into this as a career. Completing this fintech course from Harvard University Online in your own time ensures that you can make the switch into the industry at your own pace and when the timing is suitable for you. Financial services will always be required; there is no doubt this is an industry and form of technology that is here to stay. 

3. Renewable Energy

This is a term that we feel many people reading this and beyond are familiar with, for it is something we have grown accustomed to throughout recent decades. There has been a significant focus on renewable energy throughout the years, with this idea gaining more traction since the United States rejoined the Paris Climate Agreement

Clean energy is important to many people, not just those who are eco-conscious. The renewable energy industry is set to grow exponentially in the coming year, with analysis experts estimating that the growth could pose a threat to the traditional use of coal. 

Expanding into an industry like this is a lot easier than most people realise. Beginning your career change by volunteering in the sector to develop your passion is the best place to start. From here, you can learn more about the processes and establish whether there are more specific skills that you need to learn and develop before applying for a role. 

It goes without saying, but emerging industries provide a multitude of career and growth opportunities. Understanding what the first steps are and moving forward from there is sure to ensure you land a career you are happy with. No matter which emerging industry has caught your eye, go forth knowing you are making the right moves and will be working with the latest technologies in no time.

When you're transferring money overseas, the process might seem like it takes a lifetime. But why is this so? Money is nothing more than information. The question is, why does it take longer to send money internationally than it does to email? There are three leading causes behind this. 

First and foremost, one currency must be exchanged for another. Second, compliance checks are required in order to avoid the payment of unlawful funds. And, finally, various payment systems communicate in a variety of languages. Costs, friction, and delays can all be associated with these procedures. Payment innovators and organisations like SWIFT are working hard to create better solutions and standards for data and messaging transmission and storage.

With the growth of cross-border e-commerce, businesses must be able to take payments from clients all over the world, regardless of location. As of 2022, it is anticipated that cross-border shopping would account for 5.4 trillion US dollars in sales and account for 20% of total e-commerce sales. Amazon and eBay are two of the most prominent online marketplaces for cross-border buying, primarily in North America and Europe, and they are both owned by eBay.

If you are a merchant conducting business worldwide, you need to be able to take payments from customers in all of the countries you are considering.

So, what are cross-border payments, and how do they work?

Cross-border payments are transactions in which the payer and the transaction receiver are based in different countries from where the transaction is being processed. Transactions can take place between people, businesses, or financial organisations that are attempting to move funds across borders. In order to accept cross-border payments, merchants will need to partner with a payment service provider capable of processing a diverse variety of payment methods.

How does a cross-border payment transfer operate?

In order to move funds across borders, banks and a diverse set of domestic companies collaborate to complete the transaction. When a transaction is made, a "correspondent bank," which represents the entity seeking the money, communicates with a "respondent bank," which represents the entity purchasing the item being purchased.

There are counterparts for every bank in each of the world's major cities in a different city. Consequently, money will first leave the buyer's bank and go to that bank's counterpart in the merchant nation, where they will be prepared for remittance to the buyer. The merchant's bank will then receive the money and it will be deposited into the merchant's account as soon as possible. These banks frequently collaborate with others to move money, which frequently entails more than four banking locations interacting with one another, traversing many currencies, and dealing with a variety of taxes.

What are the benefits of investing in cross-border payment solutions?

Customers want to make payments in an easy and familiar method, such as by credit card. As a result, it is advisable to research the preferred payment methods in the territories you intend to target. Depending on the country, international payments usually take between two and five business days to clear. The greater the number of financial institutions that the money must pass through, the longer it will take to complete the transaction.

You must identify all elements of a cross-border transaction if you want to run a successful worldwide business. These processes must be recognised and, if necessary, modified to ensure that the consumer has a positive experience while making an international purchase online.

As the number of individuals who own smartphones continues to rise worldwide, they have practically unlimited access to financial services and online payment solutions, with mobile wallets experiencing considerable and consistent development. Because of this expansion, the volume of cross-border business is expanding.

Cross-border payments: What the future holds

The market for cross-border payments has traditionally been dominated by financial institutions. Because there was minimal competition among the dominant global correspondent banks, cross-border transactions were fraught with difficulties for ordinary customers and companies alike.

As real-time cross-border payments become more widely accepted, techniques such as Visa Direct and SWIFT GPI will rise in popularity, and this will become more common. Strong Customer Authentication, mandated by PSD2 regulation, is another characteristic that makes cross-border payments more efficient. Payments made inside the European Economic Area will be required to go through a two-factor authentication procedure in order to authenticate the identity of the cardholder as a result of this new legal requirement. 

Looking at the public opinion, it is recommended that merchants deal with a payment service provider that provides quick payment processing, transparent charge structures, a secure worldwide payment gateway, a variety of local payment options, and a variety of settlement currencies.

Businesses use invoice finance as a means of raising capital without giving up equity or other collateral, and it's also the only form of business loan available in many markets across the world. This guide will help you understand what business invoice finance is, how it works, and whether or not this business funding option could work for your business. 

What is invoice finance and how does it work?

Invoice finance (also called accounts receivable financing) is a type of finance that allows businesses to borrow money against the money they are owed from customers. Banks and other lenders are often unwilling to lend to small businesses because the business's credit history is not as strong as a bigger business. Invoice finance allows businesses to get the cash they need by borrowing against the invoices they have already sent out. This means that even if the business has not yet been paid for the services or goods it has provided, it can still get a loan based on those invoices.

The lender will advance a percentage of the total invoice value to the business, and then collect repayment plus interest once the customer pays their invoice.

The benefits of invoice financing

Invoice financing can help your business by providing quick and easy access to cash. This type of financing allows businesses to borrow money against the value of their outstanding invoices. This can provide a much-needed cash infusion when you need it most, helping you to grow your business and maintain liquidity.

Business invoice finance can also help you improve your company's cash flow by accelerating the collection process on outstanding invoices. Funds are typically available within 24 hours of submitting an invoice for financing, so you can get the working capital you need quickly. And because there are no lengthy application processes or credit checks involved, this type of financing is a great option for businesses of all sizes.

How to get started with invoice finance

Getting started with invoice finance is quite easy. First, you need to find a reputable company that deals with business invoice finance lending. Next, the application process needs to be completed which includes providing personal and financial information relevant to your creditworthiness. Thirdly you will receive an email confirming acceptance into their program and once approved they will send you detailed instructions on how to use the service in exchange for an agreed down payment at closing plus interest over a time period dictated by terms of agreement upon purchase or lease agreements made prior to invoice finance transaction taking place.

Why should you choose to invoice over other funding options?

Invoice financing is a type of short-term loan that can be used to cover current expenses. It's also an excellent way to finance new or expanding businesses, as the funds are provided on an invoice basis with no collateral required. The lender doesn't care about your credit rating, so you don't need to go through the hassle of applying for a conventional loan. You'll get your money quickly and easily without any fuss just how it should be.

Businesses who use invoicing financing often find themselves with more cash on hand than they had before because they're able to get quick access to funds when needed without having too much debt hanging over them at any one time. 

What are the risks involved with invoice financing?

The risks involved with invoice financing are typically the same as any other form of business credit. The lender will want to know what you plan to do with the money, and there may be some restrictions on how it can be used depending on the terms of your agreement with the lender. There is always a chance that an invoice won't get paid, which could result in liens being placed against personal property or even bankruptcy if it's a corporation.

The two clear leaders in this emerging digital economy are the US and China. Their current dominance in platform-based enterprises means that they are the most prepared for the forthcoming wave of disruption, which is due to their ‘platform vision’, i.e., their understanding of the underlying logic and digital architectures of the new digital economy. China especially is demonstrating long-term strategic thinking with considerable investment and technology partnerships in other countries.

The impact of the digital economy is the result of two major disruptive innovations—platform-based business models and deep technologies such as data analytics, blockchain, quantum computing and advances in the life sciences such as nanotechnology. In order to understand how digital technologies are already revolutionising business, leaders need to develop an organisation-wide platform vision to overcome the conceptual confusion that often exists between digital businesses, systems and platforms.

These differing concepts can be best understood by looking at how the digitalisation of business evolved. At the start of the first internet wave in the early 1990s, companies started to build portals that provided new channels to market, powered by the first e-commerce technologies. Online portals such as AOL and CompuServe, and then mobile portals such as British Telecom's Genie Internet, created unified customer experiences by integrating information such as news, travel, weather, sports, and entertainment with the first generation of online shopping services.

As web technologies and digital user experience design practices developed, portals brought new channels, media, interfaces, processes and technologies into the economy. Following this phase, we learned to create new digital systems. A digital system is an integrated set of digital components, service interfaces and computational infrastructure that is highly scalable, available, and economically efficient. Some examples are customer relationship management (CRM) systems, learning management systems (LMS), and content management systems (CMS).

Our personal and professional lives will be changed dramatically with the introduction of virtual worlds called ‘metaverses’ - digital worlds which blur the distinction between our real-world and virtual lives with social media becoming more of a gaming experience.

In the following phase of digitalisation, these systems were integrated to create digital solutions capable of producing or augmenting critical business capabilities. An example is a multi-channel marketing solution that can send a range of messages such as emails, SMS messages and which defines rules, business logic, and market segmentation on communications workflows. So a digital solution contains multiple digital systems and critically impacts on one or more business capabilities.

Digital solutions usually have an internal perspective rather than user-centric platforms and are based on niche business capabilities. They are always created in a closed manner, meaning they cannot scale and extend to new markets and value propositions. Today, many modern startups are closed digital solutions rather than being built on an open platform logic. However, this does not stop these solutions from being positioned as platforms, resulting in conceptual confusion for leaders who are not fully digitally literate.

This architectural misunderstanding can present significant challenges for businesses that wish to transform digitally through acquisitions. Purchased businesses can often be challenging to integrate into holding companies because their digital systems are not interoperable. Digital solutions can be evolved into platforms through architectural re-engineering, a process that requires the various digital components to be made open for extension, evolution and reconfiguration.

Platform-based business models can be understood by categorising the way in which people interact with them in three core ways:

1) Core interactions

Relatively simple fundamental interactions which reinforce the core value proposition.

2) Volume functions

These allow a platform to increase the number of people who use it.

3) Exchanges of value

The access offered by a platform in return for users sharing personal information and content.

When these different forms of interactions are explicitly understood, organisations are then able to build platforms flexibly, meaning that they can be opened up with extensions to create new solutions created by external partners. It is this aspect that is transforming the very structure of our global economy, where the focus is no longer on single businesses but whole ecosystems. Today, for example, Instagram is not just a platform. There is an entire ecosystem of solutions that utilise the platform’s functionalities.

While at present digital technologies are behind the drive towards digital transformation, it is the flexibility and extensibility of platforms that is facilitating the next wave of innovation, allowing businesses to grow by rapidly customising the way in which they deliver value to customers and extending their offers into new markets and sectors.

Our personal and professional lives will be changed dramatically with the introduction of virtual worlds called ‘metaverses’ - digital worlds which blur the distinction between our real-world and virtual lives with social media becoming more of a gaming experience. While Facebook recently announced its new name Meta to reflect its new focus on developing its own metaverse, other innovative virtual worlds have already started to capture people’s imagination. Developments such as NFTs are now allowing digital-only fashion houses such as The Fabricant to work with brands such as Adidas, Puma and Tommy Hilfiger to produce highly desirable fashion that only has a digital existence.

The vision of metaverses being the experiential basis of the digital economy will be made possible through the breakthrough advances in quantum computing now being achieved. A team of scientists in China led by quantum physicist Pan Jianwei recently announced that their new Jiuzhang 2.0 quantum computer was 10 billion times faster than its previous version, meaning that it can solve a problem in one millisecond that the world’s fastest supercomputer currently takes about 30 trillion years to solve.

While practical and commercial solutions are still a few years away from being realised, leaders need to start understanding the implications for quantum computing now, in order to ensure that they are fully prepared for those specific areas in which this type of technology is suitable for. Extremely large data sets will be searchable almost instantaneously, and real-world complex problems that were previously intractable will soon become solvable, such as computation in physics, chemistry and cybersecurity and providing optimisation solutions such as Volkswagen Group are developing in transportation and JP Morgan are developing in financial services.

Society is now at a bifurcation point, and we do not yet fully know which new order will emerge from the current chaos and complexity. Many people are now sensing dangers from having a Meta/Facebook level of monopoly in the digital economy due to the controversies that have recently come to light. But at the same time, we should not allow these understandable concerns to stop our most creative designers and entrepreneurs to discover new ways of connecting, relating, transacting and being in the digital economy, elevating humanity and amplifying our impact in the digital economy of the future, whatever form it may take.

 

 Simon Robinson is the Global CEO of Holonomics and co-author of Deep Tech and the Amplified Organisation: How to elevate, scale and amplify your business through the New 4Ps of platforms, purpose, people and planet,

While investing in such technology has been vital to helping many businesses survive and thrive in the pandemic, one department that is often overlooked is finance. Rob Israch, General Manager Europe and CMO at Tipalti, explains why this needs to change.

Despite advances in technology and the adoption of cloud accounting software over the last decade, it is still common for businesses to complete many finance processes manually. In fact, we know from our recent research that nearly a third (29%) of CFOs in the UK are dealing with more manual financial operations than ever before. Not only is this wasteful in time and money, but it is also holding finance leaders back from working on important strategic initiatives. We know that driving international expansion, incorporating environment, social and governance (ESG) and sustainability, and dealing with changes brought about by the global pandemic and Brexit – are all causes of complexity for already-busy CFOs.

In order for finance teams to evolve and become the strategic heart of a business, instead of being siloed and viewed as only fulfilling statutory requirements, adoption of automation technology is vital. Any resistance around adopting such technology, which is often that the perception that manual operations is good enough, can be squashed when we look at the benefit it brings businesses. Applying new tools to automate everyday tasks such as payroll, accounts payable, purchase order management, invoice management, group consolidation, and expense management will increase the efficiency of finance teams, allowing them to produce fast and high-quality information. In turn, stakeholders can benefit from increased agility to act on timely management information. Below are the specific benefits businesses that modernise their finance department will see.

Payroll

Payroll is a critical finance task. Employees are one of the most important assets within any business, so it's important to keep them happy by paying them accurately and on time. However, it is easy to get wrong by failing to submit up-to-date information about leavers and joiners, and not providing accurate employee tax codes. Its completion also has added pressure due to being time-sensitive and needing to be performed within a precise and tight deadline each month.

Payroll systems usually are not connected, meaning finance teams have to manually key in or export data to core accounting software and banking providers. However, many payroll processes can now be automated using solutions connecting accounting software and banking providers to provide an all-in-one workflow - saving time and reducing the chance of human error by overcoming the need to move data into different systems, either manually or by exporting and importing CSV files. A particular benefit is not having to recreate payroll journals, which is a notoriously fiddly task.

Accounts payable

Similar to payroll, accounts payable is an essential and regular task for finance teams. Ordinarily completed once a week or fortnight, it takes significant time to collate all invoices, enter payment details onto banking platforms and attain the necessary approvals for payment.

Incorporating vendors that leverage automation to facilitate multiple approvals and pull payment data from accounting software to a banking and payments interface, removes the friction associated with payment runs so they can be completed seamlessly, while also reducing the risk of manual payment errors and fraud.

Many accounts payable solutions reconcile payments automatically, saving further time, which can be used to complete higher-value tasks. A further benefit is better supplier relationships, providing visibility of payment status and enabling proactive communication to suppliers, while also helping reduce the likelihood of invoices being paid late, removing the risk of late payment penalty fees.

As CFOs’ roles and responsibilities grow, an increasing amount of pressure is put on the finance team to focus on tasks that help grow businesses – it’s essential more importance is placed on adopting finance automation as part of businesses’ wider digital transformation plans.

Purchase Orders (POs)

POs play a key role in financial control, with many companies insisting on their use for spend above a particular threshold. The creation and approval of POs are commonly a pain point for companies. There can be a disconnect between budget owners and suppliers, resulting in invoices being raised with incorrect or fully utilised PO numbers.

Using an automated PO tool that integrates to the core accounting platform streamlines processes so they can be created on the fly or from within forecasts. Additionally, they can auto-match invoices to PO numbers when received, eliminating the risk of being assigned incorrectly and delaying payment to critical suppliers.

Group consolidation

A number of core accounting software providers don't include functionality to consolidate at a group level. Finance professionals can get around this by exporting figures for individual companies into spreadsheets and manually making adjustments to consolidate group companies. Alongside the risk of entering data incorrectly and a potential delay to month-end close, this approach requires judgment due to often needing to consider which exchange rates to use and making adjustments based on the accounting standards under which the parent company is prepared. For example, this may include whether to recognise unreleased foreign currency gains/losses in the balance sheet or profit and loss, or revenue recognition treatment.

Using core accounting software that has consolidation features, or a third-party consolidation package, will ensure consistent treatment across all group companies and save finance employees from the hassle of exporting and manipulating accounts data.

Expense management

Managing employee expenses has historically been a chore for finance teams due to having to chase colleagues for their reports at month-end, alongside also needing sign-off from managers for approval. Additionally, the quality of submitted reports is often patchy, with receipts missing and spend being taken to the wrong accounting category. Embracing an automated expense management solution results in more accurate expense reports, allowing for easy upload of supporting receipts, OCR data extraction, and easy imports into accounting software.

As CFOs’ roles and responsibilities grow, an increasing amount of pressure is put on the finance team to focus on tasks that help grow businesses – it’s essential more importance is placed on adopting finance automation as part of businesses’ wider digital transformation plans. Embracing automation for all of the above tasks will benefit finance teams and the wider business. Finance team members will be able to use their time to produce up-to-date reports, providing financial and operational insights into company performance to grow sales, optimise KPIs and finetune acquisition channels.

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