Confident - or over-confident?
Posted 8 February 2008 at 8:23AM by Ian Betteridge in Hints and tips
According to the latest NatWest and RBS Small Business Monitor report, small business are optimistic about the coming year. A full 36% of them expect 2008 to bring increased sales - despite only 16% of them seeing profits rise in 2007. That means that not only are many small businesses not expecting a tough year - they actually believe that in some ways 2008 might turn out to be better than 2007.
Perhaps this is one of the reasons why a report by think-tank The Tenon Forum claims that British small businesses are "burying their heads in the sand". Although the report specifically talks about attitudes to debt - lots of businesses are getting into it - this statement could be seen as applying to small business attitudes as to the coming year as a whole.
The issue seems to be that, despite the overall doom and gloom about the health of banks (and thus credit), no one really seems to be sure about what's going to happen this year. As we mentioned last week, statistics for insolvency haven't yet shown any increase. While many retailers had a bad Christmas, some bucked the trend - showing that a good company can profit even in uncertain times.
But business performs best when confidence abounds. When they have confidence in the economy, entrepreneurs are prepared to take risks - which means innovative businesses get their chance. When consumers are confident, they are prepared to spend more, which gives the overall economy a boost. And when investors are confident, they are prepared to put up the money for new and growing businesses.
Perhaps this explains why some small businesses are still clinging to the hope that this will be a bigger and better year than 2007 - the alternative is to surrender some of that confidence, and that's not an acceptable option.
However, if there's a doubt over the future of your business, there's no need to put your head in the sand, as there's plenty of good advice around - take a look at our sections on Controlling costs and Managing gorwth on Business insight.
Tags: bt, bt broadbandoffice, economy
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Comments
2. At February 12, 2008 8:26 PM, paul vousden wrote:
I agree that there is a real danger of many peope 'sleep talking' their way into a downturn or recession. First a recession is technically a couple of quarters with no growth - ie: things stay roughly the same as they are now. There is a real danger that people panic and start to imagine that a recssion or a downturn means the end of civilised life as we know it. For most people a slowdown means a little less activity but it doesn't mean we are all about to go back to living in caves and eating berries and insects. One of the key responses for a small business during difficult times is to simply work harder to attract and keep customers. I witness regularly, as I'm sure others do, poor customer service and complacent attitudes by staff. A tightening of spending is good for making everyone realise that their hard earned poinds should only be spent with those businesses that deserve it. My consultancy business is targetd at a range of organisations helping them compete and change in a dynamic world and I will enjoy generating more business by being more enthusiastic, focused and effective at what I do.
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1. At February 8, 2008 1:31 PM, Ian Jenkins wrote: