Recession 'should lead to changing business strategies'

Date: 2nd October 2009

Small businesses in the UK should make adapting to the post-credit crunch market conditions a top priority, an industry group advised today (October 2nd).

A representative of the National Federation of Enterprise Agencies (NFEA) identified the changing risk profiles currently affecting the nation's entrepreneurs, including the higher chances of debtors not paying back money owed in the recession.

These comments follow the release of major new research from insurance giant Aviva earlier this week, which showed that 56 per cent of the UK's smaller firms had taken steps to diversify their operations recently.

The insurer also found that 28 per cent had increased customer promotions or discounts, while 18 per cent had cut staff benefits in order to survive the downturn.

George Derbyshire, chief executive at the NAEA, said: "The trick is to manage risk and to do that you must firstly recognise it.

"There are lots of things which can be done - being rigorous in billing debtors, doing credit checks, refocusing your marketing, for example."

A survey from the Department for Business, Innovation and Skills earlier this month also showed that 40 per cent of business people had developed "creative solutions" to strengthen their firms in the recession.