Small firms fighting the economy blues

The BBC has returned to the 10 small firms they are following through the recession to find out how they fared during December, and how they are feeling about prospects for the next year. The results are surprisingly upbeat; several are actually feeling more optimistic than they did a month ago, and report a better-than-feared month in December. The main concern for many of them is the availability of finance from their banks, in some cases for themselves and in others for their customers and their suppliers, and rising costs of supplies is a worry too.

One, a cider maker. comments that the fall in VAT was probably more of a nuisance to the business than it was worth in terms of extra sales, particularly as it was accompanied by an increase in excise duty which wiped out the benefit. Only one in the manufacturing sector has had to reduce workforce so far, and the hotelkeeper in the Isle of Wight is actually reporting higher bookings for January than in 2009. A significant theme amongst them is working hard to find ways to keep market share and so survive through the next year – through refurbishing, finding new markets or cutting costs – and it is clear that a good understanding of how and why their cash flow varies from month-to-month is vital too – see the comments of the dental goods maker and the solicitor.