Editorial
business
Small business survival guide:
Surviving the downturn
By Ross Geraghty
‘recession’ is one of those loaded words, a bit like ‘unemployment’, that politicians just don’t
want to be the first to say. They leave it to economists – of course it is an economics term – to
form part of the illusion that politics and economics are unlinked, unrelated and independent.
The Bush government’s $700bn banking bailout plan in late 2008, which united critics across
from both left and right of the political divide, put paid to this myth once and for all.
t took until late into 2008 for the Governor forever and that there will be an upswing. During Surviving hard economic times is
I
of the Bank of England, Mervyn King, to this intervening time there will be a lot of particularly tricky for SMEs and entrepreneurs,
say that Britain is in recession, meaning consolidation in larger and smaller companies.” and small business owners are looking around for
that the economy has shrunk for two As this article goes to print, loans for small to advice from almost any quarter. Dan Steppe,
consecutive quarters. The result? A huge fall in medium enterprises (SMEs) are not only harder director of the entrepreneur program at the
consumer confidence, a massive drop in the to find from overly cautious banks, but University of Houston’s C. T. Bauer College of
FTSE 100 shares index, the pound’s worst fall considerably more expensive than they’ve been Business, says that there is a way to remain
against the dollar in several years and predicted for decades. Consumers are tightening their belts resilient in the midst of so much uncertainty.
doom and gloom for the business world for the and starting to spend only on necessities, which “It’s important to face facts but avoid being
foreseeable future. has a major impact on SMEs. Likewise, these drawn into the media melodrama,” he says. “We
“Nobody knows how long the economic companies are starting to look carefully at who got into this problem because we have too much
downturn will last,” says Paul Danos, Dean of they have as suppliers and customers. Is their next debt and not enough collateral. These problems
Tuck School of Business at Dartmouth, USA. major contract going to be able to pay their bills have not been solved. We are going to be or are
“But what we do know is that no recession lasts and on time? already in a recession.”
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