Nick James' Business BlogBy Nick James
September 07, 2009
I’m an eternal optimist. I know that people who are always looking on the bright side can be quite aggravating at times, but my defence is that success in business depends on finding the best elements in any given situation.
So when I read news that Britain is finally coming out of recession, rather than giving a groan of disbelief I was hopeful that this could, indeed, be the case.
I noted the report from The Institute of Chartered Accountants in England and Wales which pre-dicts our economy will grow by around 0.5 per cent later this year, reversing what was previously a downward spiral.
To add to this hopeful news, I have personally learnt from client feedback that many local hotels and restaurants are seeing a slow but steady increase in customer volumes.
At last there’s movement in the housing market and the nearer we get to Christmas the more our retail industry will enjoy increased consumer expenditure.
But even though I am an optimist, I base my optimism in reality. I know that while any signs of recovery in our economy are to be applauded, they are not to be taken for granted.
It’s a hard but true fact that nearly 2.5 million people are officially unemployed in this country at the moment and this is the highest level for over 14 years.
Young people in particular have been hit by the lack of jobs as around 928,000 of under 25’s are now without work.
However the media reports the trends in our economy it’s clear that, no matter how statistics are presented, we can only live our own personal experience of this recession.
For many there’s simply nothing to be optimistic about. If you are without the means of support-ing either yourself or your family and can’t find a job, reading of a new sense of buoyancy in the banking industry may not mean a great deal.
Many of my clients have been in just this situation. They were the victims of the recession and lost their jobs through no fault of their own.
Luckily, through their foresight and determination they have actually managed to become part of another interesting statistic.
This one shows that during 2009 nearly 500,000 new business start ups will be created, many of which have been funded by their owner’s redundancy payments.
A large percentage of these new businesses will be sustainable, whatever turn the economy takes. They have begun as a one-person venture and are likely to be run from a dedicated work room at home.
This ensures the minimum of expenditure in the embryonic stages of the business and avoids ini-tial high level debt, which is the ultimate business risk.
This type of new start up business only expands when its income levels are high enough to up-hold such growth self-sufficiently.
For these businesses the onus is not on making huge amounts of money quickly and then selling on, it’s about generating a reasonable income and getting to know the market.
Yes, times have indeed changed and the recession has ensured that there will be plenty of really good people available for these businesses to employ, when the time is right financially for them to expand.
If there’s one good thing that has happened throughout this recession it’s that common sense has made something of a break through in the business world.
The owners of new start up businesses now operate from an altered philosophy. Any debt they in-cur is likely to be low level debt and they make far more realistic plans for future expansion than did many of their predecessors.
Already small to medium sized businesses employ 60 per cent of the workforce and in my view, prevailing circumstances will encourage this figure to gradually increase further throughout the year.
Progress may be slow at first but eventually this new, more level-headed, breed of entrepreneur will create the jobs we need so badly in this country.
They will ensure that the benefits of any economic recovery are shared out more fairly amongst the population by building their companies on the right sort of business principles.
Now, that really is something to be optimistic about.