Small Firms use Downturn to Create Opportunities
More than a quarter of small businesses are using the economic downturn to seize new business opportunities, according to the Tenon Forum.
Their research has revealed that 29% of small businesses say they are benefiting from the downturn. Of these, 40% have taken clients from competitors, 13% have bought assets or stock at a competitive price, and 7% have acquired other businesses.
According to Tenon director of recovery Martin Austin, small firms can also benefit from the downturn by recruiting staff from other businesses.
“There are opportunities in every sector, but conversely the worst–hit sectors are the ones where there is perhaps the most opportunity, in terms of picking up contracts or buying competitors.”
“Whether or not a business can take these opportunities depends on whether they’ve got the credit lines to make acquisitions or employ new people, and whether they’ve got shareholders who want to inject more money into the business,” he added.
The National Federation of Enterprise Agencies (NFEA) agreed that firms should not be deterred by the current economic situation, but urged small–business owners to be cautious. NFEA chief executive George Derbyshire said:
“It is encouraging to see that entrepreneurs are aware of potential opportunities for their businesses and are actively seeking these opportunities. We know that there are deals to be had and savings to be made, but businesses still need to be vigilant when it comes to looking at new opportunities.”
“Small–business owners need to focus on running a well–managed business first and foremost,” he added.
To learn more about acquiring a business, read our article on strategic acquisitions