Adaptability aiding small firms in recession battle
Mon, 09 Nov 2009
The ability of many small and medium-sized enterprises (SMEs) to react to changing markets quickly is helping them to record strong profits, a study has indicated.
Research conducted by Kingston University on behalf of the Workspace Group, suggests that the flexible SME community has performed far better than many forecasters thought possible during the UK's worst recession since the 1930s.
Some 48 per cent of SMEs either maintained or increased their levels of profitability in 2008-09, the report found, while 46 per cent maintained or actually improved upon sales volumes achieved before the downturn.
Demonstrating their agility, 93 per cent took steps to win new business and 88 per cent introduced cost-cutting initiatives.
In addition, 58 per cent of companies introduced new products or services, while 58 per cent of business owners worked longer hours in a bid to raise productivity.
Professor David Smallbone and his colleagues at Kingston University stated that the recession so far has represented "both a challenge and an opportunity" for UK firms.
They commented: "Although limited resources render small firms vulnerable to changes in the business environment, making survival a challenge, they are able to exert an important influence over their own performance and survival.
"The SME sector has demonstrated its resilience throughout this period, which bodes well for the economy as we gradually move out of recession."
Last week, the Confederation of British Industry's Trends Survey indicated that confidence is rising within the UK SME sector.
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