Small Business Matters

UK economy still in recession

This morning’s unexpected news that the UK economy is still in recession is likely to weigh heavily on the minds of small business owners. According to the official figures from the Office of National Statistics (ONS) the UK economy contracted by 0.4% between July and September – a record sixth successive quarter of recession. Despite hopes that the recession was finally over, these figures indicate that the bumpy ride for small businesses owners could continue.

 
 

Small businesses owners have shown incredible grit and determination to survive this downturn. The customer research that we conducted over the summer showed that one in four small businesses put the success of their business in the recession down to their own individual efforts and that of the team they work with. Today’s news means that the struggle is by no means over.

Finger on the [Business] Pulse

The 2009 Business Pulse research launched at this year’s Small Business Week (19 – 23 October) has uncovered some interesting statistics and trends from Small Business Britain.

One point that stood out to us was that 48% of small business owners said that advice is essential to advancing their business. The fact that many small business owners are calling out for access to better advice and resources is something that we have blogged about previously and that we feel very strongly about. Initiatives like Small Business Week are a good chance to shout about these issues, and to make sure that small businesses are getting the support they need.

The small business owners surveyed were also largely optimistic about the future. 62% said that they expected to see a significant growth in profit within the next 18 months, primarily through increased marketing spend and investment in technology. Interestingly, it was the businesses who want to be at the forefront of technology who were also the ones who said that they have been least impacted by the recession and were most optimistic about the upturn.

It’s not over yet, but the future’s bright!

According to a new survey from The Open University Business School there are few signs that the recession is lifting for Britain’s small firms. Over half of the firms (52%) surveyed have seen their sales fall, and the economic climate is still their top problem, as it has been for all this year. On the other hand the future is looking slightly brighter, with one third of respondents expecting to increase sales over the next three months.

One sales channel that many small businesses overlook is the internet. In fact, according to research from PayPal and Mr. Site, more than half of small businesses in the UK do not have an online presence at all. This could be costing them valuable sales, especially as many potential customers will use the Internet to research their options.

Reliance on small businesses increases

 At all three of the party conferences, UK small businesses have been firmly on the agenda. For example, last week David Cameron spoke about the importance of entrepreneurs to society “I see a country with entrepreneurs everywhere, bringing their ideas to life – and life to our great towns and cities”. It was positive news for small businesses of Britain!

Small business owners can start to hope for extra support to grow their businesses. This benefits everyone, as start-ups create employment, support the local community and bring strength to the economy as a whole. As we slowly come out of last year’s global financial crisis, the priority for next year is to get Britain working. 

Small businesses and start-ups have always played a role in this, but now more than ever society is heavily relying on small businesses to create jobs. There are also plans to temporarily freeze the National Insurance of start-ups and there is recent research by Culture map to prove how small businesses are considered the most recession resilient sector of the UK.

What this means for small business owners is that increased support is to be expected, the sector may be set to grow and competition is likely to rise. The opportunities are there for those who are willing to take them.