Despite widespread concerns of a looming recession, the majority of entrepreneurs have not put any plans in place to see them through tougher times ahead, research has shown.
A report from entrepreneur think tank the Tenon Forum has revealed that, despite harbouring concerns about the coming year, almost 40% of small businesses do not have any stategies with which to address key business risks.
In particular, more than half of entrepreneurs in the transportation sector admitted they had no plans in place for dealing with a recession, compared to 47% in agriculture and 38% in retail.
When asked what they perceived to be the biggest threat to their businesses in the next two years, a fifth of small firms cited competition, 19% said time and money necessary to deal with red tape and a further 19% were worried about recruiting talented staff.
Generating new business and securing finance was cited as a concern by 13%.
Andy Raynor, CEO of Tenon, commented: “Despite recent interest rate movements, talk of recession is still prevalent so it’s understandable that entrepreneurs at the helm of the UK’s [small firms] are nervous about what 2008 will bring.
“Many of today’s owner-managers will not have experienced such a pronounced economic downturn before so it’s extremely important that they put robust plans in place now in the event of challenging times ahead.”
Tenon has advised entrepreneurs to ‘recession-proof’ their business, by taking steps such as pricing properly rather than over-reacting to market conditions, checking employment terms and recognising who the key players are, managing cashflow and costs carefully, having the best possible relationship with the bank and keeping robust, up-to-date financial records.
© Crimson Business Ltd. 2008
