Remember the lessons from this recession
AS THE UK’s economy limps back to health the fate of small businesses is still hanging in the balance. A recent survey by the Federation for Small Businesses suggests that the economic recovery is still too fragile for small firms to take on more staff. The economic environment is full of uncertainty and small firms need to work extra hard. But what can firms do to make themselves resilient to economic downturns? We asked three entrepreneurs how they have protected their businesses and positioned them to benefit from the economic recovery.
Danny Gabay Fathom Consulting
If your business actually did well during the recession like Fathom Consulting, the economic consultancy, which saw an increase in demand for its independent economic research, then you need to convert this into long-term gain. “At Fathom we have concentrated on marketing and sales in the past year and actually increased staff numbers in these areas,” says Gabay. One of the lasting repercussions of this recession is the shortage of credit. “This means that businesses will have to grow with retained earnings, which could limit the scope to start new projects.”
Nick Giles Seven Hills
“The recession can be an opportunity for an entrepreneur to start a business,” says Nick Giles, who started Seven Hills, a communications consultancy, earlier this year. “You need to get across who you are and what you do so that potential clients know exactly what they are spending their money on, especially in an environment like this.” Giles says that social media is vital for businesses that rely on communication: “We are a client-facing business who rely on word-of-mouth, so social media is a way to get our message across to a huge audience for very little cost.”
Andrew Affleck Low Carbon Investors
The key thing is to act quickly and decisively when the recession strikes, says Affleck, CEO of the venture capital firm. “We decided which companies we would invest in and which ones we wouldn’t early on. That worked for us, as it gave our strongest companies the resources needed to prepare for an economic rebound.” It’s important to modify your strategy the moment that you know economic conditions have changed so that you can plan ahead for a different economic future. Directing your resources to the most efficient projects only will pay dividends in the end, says Affleck.