The survey of small businesses in Britain has revealed that speeding up late payments is the most effective way for small firms to deal with recession. Around 42% of small businesses admit that speeding up their late payments has helped improve cash flow.
While quicker payments have helped some small firms, moving into a new market has proved to be profitable for others. Around 40% of the more entrepreneurial firms took the plunge to move into new markets, while less than 10% of the less entrepreneurial firms were willing to take the risk.
The survey conducted by the School, in association with Barclays and ACCA, has also thrown light on the different approaches firms take towards marketing and promotion. While some firms increased spending, around 20% of firms cut their promotional budget. Again there was a distinction between “more entrepreneurial” firms and the “cautious” ones.
According to James Fleck, Dean of The Open University Business School, “The economic climate presents the biggest problem facing small businesses. It is all too tempting to batten down, cut back on investment and focus efforts on a smaller leaner business offering.
“However the results from our survey clearly show that taking an aggressive stance like chasing late payments and increasing marketing spend, can bolster business performance and insulate against these external effects and provide a stronger platform for the recovery.”