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30 May 2008

Small businesses show resilience in face of credit crunch

Reference number: PR 2008 31

FSB News Release

PR/2008/31

Issue date:  Friday May 30 2008

Small businesses show resilience in face of credit crunch

Entrepreneurs and small business owners are proving resilient in the face of tough economic conditions, according to the Federation of Small Businesses (FSB). The UK’s biggest business organisation, which represents over 213,000 small firms, said that its members are finding new ways to turn a profit, despite a shrinking credit market and record fuel costs.

Mike Cherry, FSB Financial Affairs Chairman, said:

“Small businesses are under severe pressure financially. Credit is drying up, big companies are taking longer to pay their bills and fuel costs are having a massive impact on the bottom lines of businesses in almost every sector.

“But small business owners are made of tough stuff and the size of their operations allows them to be far more flexible and adapt to changing market conditions quickly. Agile entrepreneurs are finding new ways of targeting customers, changing the focus of their output or breaking into new markets altogether.

“Yes the credit crunch is a worry, but it is great to see that small business owners can still find ways of making the best of a tough economic climate.”

Mariana Robinson, Mariana-Art Gallery, Gloucestershire

“People are much more cautious about using their credit cards to buy original paintings and that’s having an impact on my bottom line. But I’m focusing on the teaching side of my business and that is growing steadily.

“Since the local shop and Post Office closed, I’ve diversified somewhat as well and the gallery now sells stamps and sweets to fill the gap in the market.”

Karoly Nunhofer, Ieko Natural Paints and Finishes, East Sussex

“One of the first things people do when they move is redecorate. But the slowdown in the housing market meant that we were getting fewer of the large, whole-house orders.

“We’ve changed the focus of our marketing to emphasize the benefits of sprucing up your existing house. Now we’re targeting homeowners who are looking to make affordable improvements to what they’ve got rather than move house.”

Richard Phillips, The Soap Kitchen, North Devon

“Ever increasing prices for raw materials and a consumer slowdown have made it a difficult month or two for us.

“But we’ve launched several online sales promotions and email campaigns to encourage our customers to buy now and that has kept the money coming in.”

Notes to editors:

The FSB is Britain''s biggest business organisation with over 213,000 members.  It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk.

Contacts:

To speak with business owners about how they’re handling the credit crunch, please contact:

Stephen Alambritis: 020 7592 8112 / 07788 422155
Simon Briault: 020 7592 8128 / 07917 628998

For regional FSB contacts please go to www.fsb.org.uk/regions