2009: Year of the Small Business?

[matt.chatterley]

With all the doom and gloom news peddled at us by the media, and amidst the reports of all various large chains bracing to go into administration (every time I switch on the TV/Radio there is allegedly another one about to fold up "any second"), I shall ask:

Do you think 2009 will be "The year of the small business"?

Will the adaptability and entrepreneurial instinct of some of Britains smaller businesses allow them to rise up into the spaces left by the collapsing behemoths around us?

Or are we all going to get flattened as the entire economy wobbles, then falls over and goes "splat"? :D

[saracen]

Here's a an idea of how it will be in 2009.

http://newsvote.bbc.co.uk/1/hi/uk/7802461.stm

[KidsBeeHappy]

It depends entirely on the banks, as there are verry few small businesses out there without any debt. However gvt edicts to banks do tend to be more be more favourable than the corporates.

[Philip Hoyle]

I foresee a golden time for some small businesses.

I know of many successful businesses, one of which achieved a turnover of £10m and employed 250 people, which sprung out of the 1991 recession - an engineer from a shipbuilding firm who had an idea but kept it to himself, found himself redundant and started up in his garage - now the product is patented worldwide and he is his small town's major employer - if he hadn't been made redundant, he'd probably never have left and his product would have remained a dream.

There are loads of small businesses who have survived the last couple of years despite huge overheads, regulatory burdens and competition - they are lean and adaptable and I have no doubt that they will flourish in 2009 just as they did in 2007 and 2008.

Most successful entreprenneurs come from poor beginnings - I have seen far more successful businesses come out of a redundancy or the incapacity of the family breadwinner meaning the other spouse has to take on the income generating role. Necessity is the mother of invention.

It's a good time for manufacturing, engineering, design, etc. Imports are more expensive, exports are more competitively priced. Wages will be lower - small firms who traditionally can't compete with the large firms will find themselves able to attract good quality employees more affordably.

We have to remember that barriers have been broken down in the last decade or two due to the internet. Small firms can now "talk" directly to customers and suppliers all over the world - we don't need intermediaries as much. Technology means everything is quicker.

I'm very positive for 2009 for our clients as we only have the smallest of businesses, very few of whom are suffering any ill effects so far, and most are still experiencing growth.

[Stephen Berry]

I would agree with previous posters in many areas -
From the Serengeti perspective - the hyena - benefiting from others work - picking up what others think useless (skin and bones in the hyenas case) and deriving benefit from it. The small, without the baggage of the big, can pick through the business bones and gain nutrient.

Also very important for the small - what do we do which the big do not do as well? Move fast - the strategies of the cheetah .... a few extracts from the chapter:
The distinctive long-legged cat of the Serengeti (Acinonyx jubatus) is famed as the fastest land animal over short distances. It has tawny, black-spotted short fur, distinctive ‘tear marks’ from the inner corner of each eye, specialist nonretractile claws and can run for short distances at up to 120 kilometers (75 miles) per hour. The cheetah is undoubtedly a sprinter and will not entertain middle distance running as a cheetah sprint will very rarely be over 200m and almost never over 300m.

The cheetah has only one strategy – speed. Everything within its body is honed to perfect speed and anything else is sacrificed in order to facilitate this strategy. The list of speed enabling modifications is awe inspiring - a deep chest and large lungs for fuller breathing, comparatively longer legs than all other cats, an oversized liver, wide strong arteries and an enlarged heart for blood efficiency, a flexible and elongated spine, wide nostrils, enlarged bronchi and a larger nasal aperture for increased oxygen intake, exposed claws for greater traction, adapted metacarpal pads enabling swift changes of direction or braking, prominent dew claws, flexible pivots on the hip and shoulder skeletal girdle and to the rear, a long tail to assist balance at high speed. Speed is of such critical importance that almost all else is sacrificed in order to maximise this competitive advantage. Cheetahs have small jaws and weak teeth ........................

The strategy of the cheetah is all about speed. It gets to its destination first. The cheetah has honed the ingrained ability to make effortless changes of direction at high speed and sacrifices everything for speed, including generating some consequent weaknesses. The strategies of the cheetah are therefore about innovating, then getting to the market first, gaining first mover advantage and building the ability to make swift directional changes when the market moves.


First mover advantage – getting into the market before anyone else – is the specialism of the entrepreneur. The entrepreneur can be fleet of foot, passionate about their dream and have the drive to develop the theme to completion. Numerically most business are small, most start with the passion of the initiator. Jill Barker was a mother who was passionate about the environment – hence she started Green Baby which sells chemical free nappies and has risen to achieve sales of £3m p.a. Darren Richards started internet dating agency Dating Direct because he did not want to remain single. The company is valued at about £35m – and his second date through the site was the answer of his dreams. Trisha Mason started renovating an old Mill in France and discovered that she could assist others to buy properties abroad. Her company VEF now turns over £8m with 30 offices in France. Other entrepreneurial steps could be traced from the founders of Coca Cola, Pepsi Cola, Levi Strauss and Harley Davidson to name just a few. The key for all of them is seeing a gap in the market and mobilising their resources and energies to fill the gap. Entrepreneurial activity generally commences for one of a number of reasons:

Frustration with the inability to buy what someone wants – and so they form a company which will do it – such as Green Baby or Dating Direct
The acquisition of a skill followed by the vision to see the opportunity to use it beyond an immediate network of friends – such as VEF or idealpresent.co.uk who recommend the most appropriate presents to buy for children.
Seeing a problem which could be solved – such as Dyson whose vacuum cleaner suffered reduced suction or Friends Reunited where the loss of contact with school friends was solved – or the Cocoa Processing Company of Ghana who have launched a brand of chocolate called Golden Tree. It claims to have solved the problem of chocolate melting in African heat. Golden Tree is allegedly non-melting chocolate.
Considering something which is already being utilised – but in a new way – such as Betfair the on-line betting site seeking to replace physical bookmakers shops
Creating something which was previously unknown – such as a strategy book which is not dry and academic – Strategies of the Serengeti !

[That Guy]

I think some small businesses will do very well and other not so well. It all depends on a number of things like:

- How much debt a business has.
- How quick customers pay outstanding invoices.
- Other Outgoings (rent, insurance etc..) with may increase.

[matt.chatterley]

I think some small businesses will do very well and other not so well. It all depends on a number of things like:

- How much debt a business has.
- How quick customers pay outstanding invoices.
- Other Outgoings (rent, insurance etc..) with may increase.

Some good replies so far. In general - yeah - debt (and need for credit) are going to be critical, since I suspect banks are not going to be lending loads (although interest rates suggest a fixed rate deal could be good!) - and will be keen to call in existing debts.

Slow customer payments are always an issue, and to some extent the "lag" is absorbed once you get a way into business, but this could worsen if/when folks hit harder times.

Other outgoings could go up - notably electricity which I believe is confirmed to rise?

However, all that said - I think my key theory is that with the cracking and crumbling of so called "retail giants" (and the rest), small niches may begin to open in markets which have been thus far heavily dominated.

The ability to adapt, of the entrepreneur (and small businessperson) places them better to react rapidly to these than large companies - for whom a sudden change of direction is not always possible!

We shall see..

[Anne Pearson]

I think it will definitely be the year for the small business. Although this country has a lot of problems at the moment it's never as bad as the picture painted by the media.
Don't forget that whenever there is a disaster...someone will be profiting from it.
I think the retail industry will continue to suffer unless they change their business model but online business should prosper.