Lloyds TSB Commercial is staging nationwide roadshows and has published a ‘Preparing for the Upturn’ guide to help businesses understand the steps they need to take.
British businesses, still reeling from the effects of recession, are ill-prepared to face a return to economic growth, even though they are aware of the need for action, according to a new study [1] from Lloyds TSB Commercial.
The research reveals that a third of firms (31 per cent) have not taken any steps whatsoever to prepare their business for the upturn, and even more (36 per cent) don’t believe they need to do anything to ensure their business is ready to benefit as the recovery starts to gain momentum.
Amongst the 31 per cent of firms that have not taken action to prepare for a recovery, 17 per cent admitted that they had not even thought about the steps they might take, and yet there was widespread recognition (43 per cent) that taking such steps would be essential if they were to survive in the long term. Almost half the firms questioned claimed they did not need any more help to prepare for the recovery.
A ‘wait and see’ attitude seems to prevail even though half of the businesses surveyed (51 per cent) have seen the lead that well prepared businesses benefited from during the last recession. This attitude prevails despite widespread recognition amongst businesses of several risks which might leave them unable to exploit the upturn.
Two thirds (64 per cent) believe their business will suffer from low cash resources, while a quarter (23 per cent) believe depleted capital will be an issue. A similar number (22 per cent) fear they will lack the capacity to meet demand for their products and services, while just over one in ten (13 per cent) are concerned about potential management or strategy gaps.
Those businesses that have started to prepare for recovery are clear about the importance of taking action. Two thirds (66 per cent) say they need to act now in order to benefit, while two fifths (42 per cent) say they don’t want to lose out when the recovery arrives. A further 14 per cent say they learned their lessons in the last recession.
The steps taken by those firms who have begun preparing is varied. A quarter (27 per cent) have sharpened up processes and working practices, and the same number have made efficiency improvements. One in ten (10 per cent) have sought additional funding, while six per cent have boosted research and development efforts. Small but significant numbers (5 per cent) are working to establish international networks, with a view to improving export prospects. The same numbers are looking more closely at the opportunities presented by the green economy.
John Maltby, managing director, Lloyds TSB Commercial said: “Recession has weighed heavily on UK businesses and it is easy to see why talk of a recovery might bring welcome relief. But in the same way that we have encouraged firms to take action to survive the downturn, they will also need to prepare for the return to growth.
“The shape and scale of any recovery is still uncertain, but one thing is clear – those businesses already looking towards the upturn and planning how to make the most of it, are the ones which will thrive. And those firms that sleepwalk towards recovery risk not just losing out but falling into the overtrading trap.”
In order to help business across the UK benefit as the recovery gathers pace, Lloyds TSB Commercial has launched a nationwide series of roadshows, as well as a comprehensive guide – ‘Preparing for the Upturn’. Both the roadshows and the guide aim to help businesses understand the benefits of planning for the upturn, the risks of failing to plan and the steps they need to take from now on.
James Caan, entrepreneur and Dragon’s Den judge, said: “Those businesses that have adapted, diversified and are prepared for the upturn are well placed to prosper and grow as the economy recovers. Businesses without a plan seldom go far and that’s especially true in times like these. It’s important that companies act now to plot how they’ll approach the opportunities that exist in the prevailing economic climate.”
The roadshows are taking place in towns across the UK throughout October and November and Lloyds TSB Commercial’s new guide, ‘Preparing for the Upturn, is available to download here
[1] Ciao research conducted in September 2009, amongst 500 senior managers within SMEs, for Lloyds TSB
