Small Business Matters

Video: Tips for succeeding in a recession

Pernille Brunn-Jensen, Managing Director Global Small Business at Intuit UK, discusses top tips for small business owners to survive the recession. Pernille responds to the question: *What step can small businesses take to help themselves?

Small business tales from the frontline

In reviewing how small businesses have fared during the recession in our recent report, we spoke to a number of small business owners about how they have coped over the past year. From a doubling of takings to a loss of over 50% of revenue, their experiences have been varied to say the least but all have taken measures to overcome challenges and ensure survival during these uncertain times.

 

Kevin Sands, for example, who runs the Racehorses Hotel in North Yorkshire, believes continual investment is crucial, despite any downturn. “When I took over the management of the hotel I made a four year plan to refurbish the entire building and, even with the downturn, I made a point of finishing what I started. It would have been unwise to start cutting back on such an important project. At the end of the day, you have to invest money to make money, but do it wisely.”

 

It’s all about people… and business strategy

As well as the cash flow management measures already mentioned in our previous post, in our Small Business Recession Report and Guide we asked respondents what positive management steps they had taken over the past twelve months. Their experiences should hopefully provide inspiration and insight to our readers. We have split the responses between business strategy and HR.

 

Business strategy

Focused only on existing business/clients

Protecting and serving the customers you already have and rely upon, was a dominant strategy adopted by nearly half (45%) of our respondents. In the vast majority of instances (80%) our respondents have witnessed the success of this strategy and not a single business owner surveyed felt this had been unsuccessful with the remainder unable to definitively state that there was a positive impact upon the business.

The small business cash flow conundrum

Managing cash flow has been a major pain point for many small businesses during the recession. In our report on how small business Britain has been faring during the economic downturn, we asked respondents of our survey what actions they had taken to overcome this challenge.

 

The most popular strategy undertaken by respondents to combat cash flow difficulties was renegotiating deadlines with customers. The opposite of renegotiating with suppliers, this measure appears to have been successful for the vast majority, with 71% seeing a positive result. 

 

Small Business Recession Review and Guide

Six months after the Office for National Statistics (ONS) officially announced that the UK is in a recession, our new report reveals how small business Britain has been holding up over the past 12 months.

The results of the research show that while one in twenty businesses have been impacted so severely by the recession that their survival may be at risk, encouragingly, one in four felt no noticeable effect and 35% had felt a negligible impact. This can be largely attributed to the sensible business decisions they have made, with three quarters of the businesses interviewed stating their survival was down to their own individual efforts.

The report also offers guidance on how to navigate your business through an economic slowdown, including practical advice from other business owners on what measures they have taken to weather the storm.

In receiving virtually no support, small business owners have used their initiative and adopted a raft of various measures over the past year to protect themselves from the downturn. The most common initiative, adopted by 45% of respondents, has been to reduce overheads and have a tighter management of outgoings. The second most popular step, which nearly a third (30%) of business owners took, was to introduce new products or services rather than other means of cost cutting. Third was renegotiating prices with suppliers, with 74% of respondents claiming success from this approach.

For additional top tips from our experts and to find out more about how you can help your business succeed in a recession download your free copy of the Small Business Recession Review and Guide.

Share with us your views and experience: how have you been coping in the downturn?

 

Small businesses turning to risky loans

It seems the lack of bank lending is continuing to impact small businesses as new research claims that small business owners are resorting to personal loans to improve cash flow. A survey of 505 small and medium-sized enterprises by investment bank Close Brothers has found that 30 per cent would take out a personal loan to finance their business while six per cent said they would use credit cards to fund operations. Although credit cards have been a staple form of finance for entrepreneurs since before the credit crunch hit, the proportion of small business owners using them has increased by 50 per cent since last year. Furthermore, a fifth of those who responded also said they would approach friends and family for the funds, which is double the percentage recorded by the survey last year.