Small businesses are feeling more confident about the economy, according to the 2009 Business Pulse report from BT. Three-quarters of the 7,2000 SMEs surveyed felt there would be an upturn in 2010 and 35% believe it will be as soon as January next year.
It's a tribute to the resilience of SMEs that they have adapted to the new situation quickly. Almost half (45%) believe that the recession has brought about changes for the better, with steps such as reducing spending (54%), and improving their marketing (26%).
Interestingly, SMEs turn to their peers for advice (47%) before their banks (29%). However, they seem to be standing on their own two feet in terms of funding because almost 4 out of 5 firms said they had not secured any external financing.
No BT survey would be complete without a reference to IT and technology – 61% of respondents said 'faster broadband speeds had had a positive impact on their business'. Better websites and ecommerce brought benefits (40%) and, says Business Pulse, 19% felt that 'social networks were having a positive effect [for businesses]'.
The picture that emerges is one of a self-reliant business community, looking forward to an upturn. But what kind of upturn and when? If the recession looked like a letter of the alphabet, which would it be? Perhaps the most common way to think of a recession is that it looks like a U; a drop, the lowest point, then recovery. But according to restructuring specialist Begbies Traynor, we're facing a W.
It says there is 'mounting evidence that we may be at the mid-point of a “W” shaped recession, with a deluge of business failures likely in 2010.' Think of the early 1980s where there was 'a temporary rise in business confidence in 1981 before rapidly deteriorating in 1982'. Begbies Traynor says 134,000 companies are facing 'material signs of financial distress'. Somewhat different reading from the Pulse report, but as small businesses we have to wind our way through this sort of seemingly contradictory information as best way can.
Perhaps the prudent way to think of things is that people are feeling positive, but they should have solid business plans in place to prepare for the worst.
