Small businesses preparing to meet challenges of economic slowdown

Research from T-Mobile has revealed that UK small businesses are increasingly looking for new ways to cut costs and guard against the impact of the credit crunch. Almost half (47%) of all SMEs surveyed have considered implementing a flexible working policy within their organisations as a means to reduce overheads to meet the challenges of a slowing economy.

However, whilst most SMEs believe that technology is becoming more important in the current economy, many feel that service providers are not adapting their offerings to give them the flexibility and advice they need. Less than half of SMEs (49%) feel that their mobile communications contracts give them adequate flexibility to be able to react to an uncertain economy. This is despite the majority (84%) of SMEs believing that technology is becoming more important in a slowing economy, and nearly half (47%) who now feel under more pressure from employees to allow them to work flexibly compared with two years ago.

Supporting the research, James Caan, CEO at private equity firm Hamilton Bradshaw and Dragon for BBC Two’s Dragons’ Den, stressed the importance of small businesses to the UK economy as it enters into a recession. Caan said: “We all know that our economy is built on the success of small businesses, which account for over half of the UK’s turnover and employment. All businesses need to take stock and revise their plans and strategy to continue to be competitive, and that means streamlining operations, reducing costs and increasing productivity. The important thing to remember is there is never a bad time to start a good business.”

Graeme Leach, chief economist at The Institute of Directors, said: “The UK has enjoyed 15 years of successive growth but this is now coming to an end. Many SMEs will have never experienced recession before and so the risk of under or over reacting to the downturn will be high. Life is going to get a lot harder before it gets better. Thus far the winds of recession have been confined to the housing and construction sectors together with certain big ticket markets such as cars. This is about to change as the ripples of recession spread out across all SME sectors.”

The research, undertaken by Vanson Bourne on behalf of T-Mobile, surveyed over 500 owners of enterprises with fewer than 250 employees across the UK, uncovering the challenges they face in the slowing economy and the difficulties in finding technology suppliers that understand their needs.

Caan continued: “In my experience, mobile working has an extremely positive impact, not just in terms of the performance and productivity of my team, but also in attracting and retaining excellent people. Mobile technology allows me to keep in touch with their progress and also means that I am always available should they need support or advice.”

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