~EDITORIAL~
W ‘Going global, regardless of how
small you are, could enable you to bypass the turgid British market’
hat direction do entrepreneurs and chief executives take their businesses in these fierce economic times? Where is the growth path? Consumers are cautious, banks are still not falling over themselves to lend, manufacturing
activity is contracting, and exports are slack. Beyond these islands, the Eurozone financial crisis is far from unravelled, the US debt problem is as intractable as ever and Chinese growth rates are no longer so assured. Waves of surveys point to plummeting business confidence. So far, so brutal. But, rather than talking ourselves into a recession, perhaps we should take comfort from some equally significant developments the other way – and chart development plans accordingly. Resurgent inflation seems less of a threat than it did recently. Input prices in August rose at their slowest pace for nearly two years, factory gate inflation is ebbing and the commodity boom could be tailing off. That should keep interest rates low and could eventually tempt some of Britain’s
surprisingly numerous cash-rich companies to spend on investment. If you can’t get much traction on the organic growth front, it might be time to tap-up the ranks of cash-rich institutional investors. This constituency has obviously been deeply risk- averse over the past two years, but they are nevertheless continuing to back ambitious entrepreneurs on the M&A trail. For proof, take a look at our Top 50 Rising Stars feature (page 30) – almost one third of the companies have conducted a corporate deal in the last year. And a salient feature is that they are buying thriving firms, rather than struggling competitors.
THRIVING TRADE Going global, regardless of how small you are, could enable you to bypass the turgid British market. Plastics Capital, an intriguing venture that manufactures an array of proprietary and unique plastic widgets, boosted its international trade 26 per cent last year. Despite having sales of circa £30 million, it is a clear global leader in its niche. For some companies, legislative changes in Britain, the EU and beyond should throw up
opportunities. Bioplastics concern Biome Technologies is working its way to profits and building up cash helped in part by environmental legislation. If you’re unable to break beyond the UK’s trading shores, the cost-cutting actions of both the public and private sectors is an opportunity to be exploited. Support services and construction outfit Interserve is a perfect example of a company benefiting from the public sector focus on efficiency. Lucky enough to be in a recession proof sector? Then the cash reserves you’re (hopefully) building up should provide a healthy war-chest for opportunistic acquisitions – and much else besides. Patent and technical translation specialist RWS Holdings is a wonderful exponent of this art. And of course, the latest revolutions online and in the digital/social media world present ample opportunities to radically alter how you market products and position your business. We know it’s not easy. We know these dog days will endure for some time. But if you can adapt to today’s conditions and thrive, a bright future beckons.
LESLIE COPELAND Editor-in-Chief
BUSINESS XL 5
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