Business confidence is at a three-year low among entrepreneurs, the latest research from the Tenon Forum has revealed.

The study has shown that just 61% of entrepreneurs are feeling upbeat about the year ahead, a substantial drop from 86% of owner-managers 12 months ago.

Added to this, the sense of unease means the number of entrepreneurs making concrete plans to weather a downturn has risen from 70% in 2007 to 87%.

Preparations for the downturn include reducing non-essential spending such as client entertaining (47%), better servicing of clients to gain competitive advantage (43%), a third are not hiring new staff and a quarter are reducing capital investments.

Despite their preparations for a downturn, 47% of entrepreneurs remain upbeat and believe the current economic conditions will present opportunities for their company. These range from the opportunity to win clients from competitors to the chance to grow their business organically. A quarter sees an opportunity to acquire struggling rival businesses.

Carl Jackson, head of Tenon recovery said that with so much negativity in the media it is unsurprising that entrepreneurs are feeling a bit glum. “It is, however, very encouraging to see that entrepreneurs are aware of the opportunities for their businesses and a significant proportion are actively seeking opportunities during the downturn,” he continued.

Yet Jackson urged caution when taking risks in the face of a potential recession. “By ensuring they have robust business plans in place, SME owners should be able to see their business survive and thrive through the tough times that may be ahead.”

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