Just as the sun seems to have finally arrived in 2013, the mood of SMEs has visibly lifted in recent months. Yes, we narrowly avoided a technical recession, posting a gain of 0.3% of GDP in the first quarter of the year, but the shift in sentiment is a little more than that. SMEs are talking about greater numbers of enquiries and an increase in general activity and while no one is yet popping champagne corks, March was certainly a substantially better month for most - including retailers.
There remains however, the need to exercise much caution. The regular showers, cold winds and morning frosts continue to remind us that summer is not yet here, just as price pressures and continued troubles in the Eurozone should remind us that while a recovery may well be taking shape, the economy remains at best fragile. Against that backdrop, it would be fairly easy to get your head down, put your umbrella up and hope that there are no further shocks around the corner.
Perhaps that attitude is reflected in the business confidence measures tracked across the course of the financial crisis and ensuing recession and indeed the reason why investment has yet to recover to pre-recession levels. It probably also goes much further than that.
There is no better example of this than international trade. How many business owners reading this have even thought about selling their products or services overseas? How many have thought about it, but have no idea where to even start? Even if you do export, do you place as much emphasis on international markets as you do domestic? I have met businesses across the country that wouldn't even consider selling in the next county. An extreme example I know, but as the UK considers its future in the European Union, it occurs to me that many of our businesses have failed to make the most of the commercial opportunities that await us in places just across the channel. Businesses have been quite clear that they view the single market as a good thing - how many take full advantage? The same can be said of emerging economies, where opportunities abound.
There is no business too small to export; there are very few products or services that couldn't be adapted for overseas markets. Britain used to sell to the world - of course economics play a key role, but our businesses could also do much more.
While on the subject of opportunity, my personal attitude has always been that economic frailty should breed confidence in business - a perfect time to seize market share, broker acquisitions - if your business really is better than its competition, it will never have a better opportunity to prove this and to make it count.
To do this however, you cannot relax, watch the news and ponder the future, if for no other reason than many an economic forecast is about as reliable as a weather forecast! The world is changing - far faster than many people realise. How does your business fit in the new economy? Are you still relevant? You should be thinking about the image you project to your clients and to your suppliers - that is just as important as the products and services you provide to them. Do your employees take time to get to know clients? Does your company engage through social media? And yes, are you actively exploring overseas markets?
For me, planning has always been the key to the most effective utilisation of this attitude, thorough research and analysis, talking to peers about their plans and experiences and getting out there and making things happen - and then learning from the experiences.
Last year in the UK, we experienced both floods and a drought within a few short months - the economy has and will continue to be no different in the months and years ahead. Those businesses that will be successful in the new economy, are those that take heed of the forecasts and prepare accordingly, but then get out there and get on with it, regardless of the weather.
In the following video, Ian Mason from the London Chamber of Commerce and Kevin Boyd, Divisional Managing Director, Santander Corporate & Commercial, provide hints and tips on how SMEs can regulate their cash flow and in the process, keep their balance sheets healthy.
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