It’s getting impossible to avoid talk of the recession. If by some miracle, you’ve managed to dodge crunch-talk at the glittery affairs you’re flitting round this festive season we’d sure like to hear how.
Talk of redundancies and the highest unemployment rate since 1997 is not for parties, business people. It dampens Christmas cheer. We don’t want to make like government and talk down the recession to justify tax increases or anything. We just want to enjoy a chat over a glass of wine and a mince pie.
Alas, a small business media roundtable is not the place for party talk.
There was much discussion of the effect of the recession on small business at one particular meeting of media, government and business reps this week. It looks like confidence has fallen considerably in the SME sector over the last month or two. Anecdotal evidence would have it that even well-run businesses are reporting difficulties, experiencing drop offs in turnover and credit issues, with many considering downsizing.
Well party poopers, that’s the bad news.
The good news is that small business has comeback. We were listening hard and have got some hopeful factoids for you to use to stamp out gloom at festive soirees. To paraphrase the entrepreneurs behind Huddle and Buyagift as well as Business Link’s Patrick Elliot and London Chamber of Commerce CEO Colin Stanbridge:
The macro economy doesn’t necessarily relate to the micro economy. Establish a business with a secure customer base you may well weather the storm and come out intact. Small companies as a rule are nimble, reactive and innovative: the recession should help weed out less solid competition.
Funding for your venture may be difficult to find, but the money is still out there. Investors are sitting on their hands waiting for costs to come down – hold out.
Unemployment and redundancy is a necessary evil: small businesses that look after their cashflow and cut back on heavy costs like staff are more likely to survive. And if you really can’t cut your team, there are other options. You could cut software costs and go open source, or maybe open up your office space to share rent. If you must recruit, cut out the middle man and use Gumtree.
Bad times have made old fashioned prudence popular. Cashflow modelling and continuity planning are in: if you build a business now, it is likely to be stronger than if built during the good times.
And sure, consumers may not be buying high value services and products. But they’re buying more and cheaper. Why not feed demand?
Startups is here to help: next time someone drops a recession bomb at a Christmas party, you know what to do.
