Starting A Recession Busting Business

Now I’m not saying that I’m a V Festival regular, but then again I’m also not a fan of slippers and The Archers as yet, so you’ll understand when I say that BBC Radio 4 is not one of my regular entertainment channels. However, this week I noticed that it was running the first episode of a new show called A Small Business, about recession busting businesses – those who launch in the midst of this recession despite the gloomy outlook. So I thought it was worth foraging north of the intellectual border just this once to see whether it was worthy of a listen, and I have to say that I was pleasantly surprised.

The presenter, Liz Barclay, portrayed a “follow your business dreams and damn the recession” attitude (in a Radio 4 reserved tone, of course), which I can seriously respect, and the recession busting business case studies she shared with us all mirrored this – though some could owe their success more to luck than judgement, as planning and research seem to have been low on their agendas when launching their businesses.

Some of the interesting statistics to come out of the programme were that out of 4.7 million businesses in the UK, only 6,000 (or 0.13%) have more than 250 staff; the rest are classified as SMEs or sole traders. So if you’re starting a small business, you’re already in the majority. SMEs provide around 60% of employment and just over 50% of the turnover of all businesses in the UK, so they are a massive contributor to the economy as well. This is why there is so much interest in what makes a recession busting business.

The bad news is that we are losing around 700 SMEs a week as they find they cannot make ends meet or close their doors for other reasons. The good news is that the recession has in no way dampened our dogged determination to succeed because for every one of those SMEs that fail, 11 new ones rise up. The unwillingness to be put off by economic indicators that has fuelled these recession busting businesses was the focus of the programme, and quite frankly should be applauded.

The general feeling is that recessions are great for two things:

1. Businesses that are focused on inexpensively making you feel better at the end of the week, e.g. make-up, beer, clothing and anything that is relatively cheap but makes you feel good about yourself even in the darkest of times. We all need something to bring a little sunshine into our lives, and the more difficult the environment in which we live, the more we cry out for some way to lighten the atmosphere a little.
   
   
2. Trialling a new business or business idea. With everyone feeling the pinch, excellent deals can be had in all areas such as office space, suppliers and advice to keep start-up costs low, and because nobody expects you to make massive profits in a recession you can start small and test the market. Once you have found a plan that works, you’ll be in an excellent position to exploit it when the recession breaks.
   

Recession busting businesses don’t need to be making massive profits. They simply need to defy the odds by surviving and thriving through to more economically stable times. In fact one of the reasons the show cited for the continued volume of start-ups launching in the UK was that, in a time when so many are losing their jobs, surviving on lower salaries and generally having a miserable time of it, starting something small yourself, where your customers express their satisfaction to you personally, is an ego boost that money simply can’t buy.

The show also pointed out that this economic climate has fostered a very different type of small business owner. We are now far more risk averse in the way we launch our businesses. With the news images of redundant bankers leaving their once-lucrative jobs with little more than a box of desk items and headlines about financial institutions that collapsed still fresh in their minds, small business owners would be more reluctant to seek out funding to start their ventures, even if the banks were lending. This actually puts them in a better position to survive the recession than those in previous financially tough times. More often than not, the recession busting business of today is one that has been started on a shoestring.

Despite my initial reservations, this episode on what makes a recession busting business was quite good, and I can’t wait for the same time next week (Tuesday 4pm on BBC Radio 4).

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View this post as a Power Point Presentation: Starting A Recession-Busting Business.