Member Article

Why some businesses are still choosing to invest in the future

Businesses feeling the impact of the nation’s financial crisis are still finding a way to invest in the future.

Sheffield financial expert Deborah Lockwood, of business turnaround and insolvency practice Graywoods, has identified one bright glimmer of hope in the midst of commercial gloom.

She points out that while all companies are facing the challenge of rising energy and supply costs, many are investing much more quickly in infrastructure that might help keep costs manageable in the long term.

“Instead of cutting back, they are actually taking the opposite approach and investing sooner than they might have done in more relaxed times,” she explained.

“They are recognising that the payback from items such as better heating or the installation of energy efficient systems will be greater than it would have been only a matter of months ago.

“In certain instances we have come across situations where chief executives and their finance teams have identified that an investment that would have had a seven-year payback term now has a payback period of as little as 18 months to two years so therefore they are looking to sign off those projects much sooner than they would have previously.

“This, of course, is good for the business making that sort of choice but, even more importantly, it generates demand for products and services, which is good too for the whole supply chain.”

Deborah added, however, that she recognised investment in the future would not be possible for every operation.

“It’s the sort of approach that make sense if you have the funds available,” she said.

“And it’s not only a financial saving that these companies are making - it’s also good business sense because it feeds into any organisation’s environmental, social and governance credentials.

“With investors and consumers increasingly selecting brands based on their reputation for ethical behaviour and their record on climate change, a healthy ESG framework is more important than ever so that initial investment will pay rewards on several fronts.”

This was posted in Bdaily's Members' News section by John Highfield .