Global Recession – Tough Times For Small Businesses

According to the International Monetary Fund, the world is set to slip into recession in 2009. As global growth of under 3% is considered a global recession, the figures showing a 2.2% growth in 2009 indicate that it is on the cards for sure.

The global economical crisis has had a serious impact on the availability of credit throughout the world, but thinking about the effects closer to home, how is it affecting the average UK small business?

Britain cannot officially be said to be in recession until two successive quarters of negative growth have been recorded, so it will be January 2009 before it can be formally announced. But in the meantime official confirmation probably doesn’t mean too much to any small business already suffering the effects of the financial slowdown.

As the global economy stumbles from one crisis to another, small businesses face the task of keeping costs down whilst trying to stay competitive and it is during these times that scrimping on certain things becomes a way of life. But this attitude can have serious consequences.

One of the major things that companies seem to immediately cut back on is marketing. however, this can have dangerous consequences and any business thinking about pulling back their marketing efforts thinking it is a good way to save money should reconsider immediately. not only will it immediately reduce your presence in the market, it will also leave the door wide open for your competitors to step in. what happens if you stop marketing but your competition continues to maintain a public profile?

Another thing that businesses feel is a good money saving exercise is cutting back on staff training. But again, this short term fix could spell long term problems. not only could key personnel defect to competitors that are not making staff investment cutbacks, but employers could be faced with a training deficit that leaves them trailing behind and unable to catch up once the economy has turned around.

Having an online presence is key to success in an age where according to market researcher GfK, 69% of consumers believe that online shopping is good for the environment and even during an economic crisis, online sales on are the up. So ignoring the need for a strong web presence is not the way to go, despite the investment needed.

In all of these situations the solution lies in cleverly cutting costs rather than cutting things out altogether. In the face of global recession, small businesses need to remain competitive and there are many ways in which they can do so. Seeking ways of lowering marketing costs by switching to online initiatives or sourcing more favourable printing rates; turning to more economical staff training methods such as video training; and locating good deals on web development are just some of the initiatives that can be undertaken, but there are lots more for the taking and with a bit of effort, it shouldn’t be too difficult to keep ahead of the game.

Global Recession – Tough Times For Small Businesses

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