In this week’s Thursday Night Insight, Nick Hague explains why, in his opinion, there will always be a place for small businesses.
Every day, when working in the office, I walk through the precinct close to where our UK office is located to go to our local deli to get my lunchtime sandwich. I have been furrowing this same path for the last 12 years and it still fills me with joy every day as I am greeted and welcomed by the local shopkeepers as if I was part of the family.
I feel highly privileged to work in close proximity to such a thriving local community where the local precinct holds many such shops that vary from clothing, homeware, aromatherapy and shoe shops through to grocers, fishmongers and butchers (and I defy anybody to show me a better butchers than Corrys). However, as our towns and cities are continued to be overrun with the marauding retail giants of Tesco and Walmart, I think it is refreshing to see how our local community (in the face of adversity with the current economic climate) is utilising its owner-managed enthusiasm to deliver a passion and engagement that is now lost from many of the faceless giants of the corporate world.
We have recently completed a piece of research for Business Link in London, speaking to small business owners in the UK’s capital city to find out what impact the credit crunch has had on their business and their future business plans. As expected, a fifth of businesses have been extremely affected by the recession, with 4 in 10 respondents stating that their overall budgets and expenditures have been significantly affected, especially the adverse impact on cashflow, reduced investment and funding, and a decline in national sales. However, even though businesses have been affected, optimism still remains high for the next 12 months with a half of business owners looking to fuel growth through ramping up marketing activity, 4 out of 10 looking to diversify into new markets, and a third looking to launch new products.
Like the local shop keepers where our office is based, I see many smaller business owners putting in superhuman efforts to make their businesses stand out and succeed against the competition in this difficult climate. In these uncertain times, small companies do hold many advantages over larger organizations, with lower central costs and greater awareness of changing trends allowing new ideas to thrive, and flexibility to react quickly to shifting demands.
Over the last 12 years of running B2B International I have experienced the difficulties and tensions as a company rises from humble beginnings into an organization that now has a global presence on three continents. I remember very early on, speaking to one of our research executives, and her saying “Why do want to grow? It is nice to work for such an intimate, family run company.” The problem is, if you always do what you always have then you always get what you have always got – if you are lucky! From our inception through to our current position we have continually fought to be adaptable, innovative and personal as we believe that customer service prevails in today’s competitive environment and that the future belongs to the smaller company. Of course, larger corporations will always enjoy economies of scale along with greater brand awareness and only large companies can carry out industrial production in the industries of automotive, steel, pharmaceutical and utility provision but, as typified by the example of General Motors, even with their large resources, things can still go horribly wrong.
A contrast is the John Lewis Partnership, the British department store and grocery chain. Here the staff really do own the business, and behave like enlightened capitalists rather than bloody-minded union members. It offers world-class service and a lesson in how important it is to keep the customer happy, and herein I think lies the answer. Smaller companies are continually looking to innovate and deliver customer service. They punch above their weight and force larger companies to up their game. In these uncertain times, the smaller business owner will continue to succeed.
STOP THE PRESS! Calling All Small Business Owners In London
We want to know the challenges you are facing as an SME in the current market conditions. Take part in the Business Link in London SME survey and tell us your opinion.
Business Link in London along with B2B International is kicking off its second wave of surveys for its Diverse Business Confidence Index Project. This research will provide an in-depth analysis of how the recession is having an impact on London’s small and medium-sized businesses (SMEs).
This survey will be the voice of over 3,000 small businesses in London and the Index will provide a timely and statistically significant insight into how different types of SMEs continue to be affected by the recession and what actions they have taken to combat its effects.
If you are a London business owner and would like to take part in the survey of the Diverse Business Confidence Index then please e-mail firstname.lastname@example.org and include your name, company name and London borough where your business is based.