Building an enduring business in times of recession requires astute decision making, implementing effective cost-cutting and survival strategies where appropriate, as well as an element of luck on many occasions. A collection of UK entrepreneurs who can justifiably be considered ‘true survivors’ of the recession discuss starting a business as well as withstanding the effects of, and even thriving during the most recent economic downturn.
Sam Hood - Amara
launched luxury, online interior design and accessory retailer, Amara
in 2005. With a background in textiles as well as the design and manufacture of ladies fashion, Hood spotted a gap in the market for a high-end interior design service outside of London which could offer luxury brands from across the world.
Hood describes the challenges faced by the business: “I believe that the challenges of running a successful business are the same in good times as well as bad. Therefore, the challenge that Amara faces everyday is to be relevant, giving our customers exactly what they require in a fashion that makes shopping with Amara a pleasurable experience. Our focus during the past 18 months has been aggressive brand acquisition (doubling the number of luxury home brands that are available on the site), continued web development to ensure the consumer's experience is as good as any of our competitors, and unrivalled customer service.”
Adding: “Small business is key to the future direction of the economy; with banks unable to lend, private investment through schemes such as the Enterprise Investment Scheme (EIS) will ensure businesses such as Amara continue to thrive over the coming years.”
Susanna Simpson - Limelight PR
is the founder and Managing Director of Limelight PR
, a 'business to business' public relations and communications agency with its headquarters in London and operations in the Middle East, U.S and Australia. Simpson launched the company aged just 23, with little more than a credit card, a phone, a computer and lots of enthusiasm. Within 12 months, she was named ‘Young PR Professional of the Year’ by PR Week magazine
Simpson explains why she believes the business has continued to be successful despite the downturn: “I maintained absolute belief in myself, my abilities and my business. Spending time with peers and fellow business owners helped as we could provide each other with an instant support network. I also put utter confidence in my team and their respective talents because, while I’m always aware of what is going on within the company, I do not need to micro-manage every detail. It is crucial to be adaptable, so when the recession hit I restructured the business to maximise productivity by utilising my team’s strengths, whilst focusing my skills where they were needed most.”
"We also made a very savvy property move during the recession. The rent for our offices near Victoria was high and we had a lot of unused space. I had always wanted to move more central to be closer to our clients and, funnily enough, the recession gave us a perfect opportunity to do so. We took up the break clause in our contract and moved to a technically smaller but much better designed office space just off Piccadilly Circus, saving £100,000 in the process.”
Warren Bennett - A Suit That Fits
graduated from Cambridge University with a Master’s Degree in Aeronautical Engineering before moving to Paris to study for an MBA. During this time, he started a small import business with suppliers in India and Nepal. This experience coupled with having an exquisite, woollen suit hand-made for him at a small family tailors in Nepal, encouraged Bennett to start A Suit That Fits
. Launched in June 2006, the business now has 33 locations nationwide.
Bennett comments that: “During the recession, we needed to continue to grow as a lean, agile business – keeping costs down but continuing to deliver a great service and provide a great product to our customers. We used the recession as an opportunity to learn, while we continued to develop our suits, we grew a fantastic service by nurturing our team and really caring about our customers. In turn, this encouraged our customers both to recommend us to their friends and to think of us whenever they needed anything style-related – enabling the business to grow even during the recession."
He continued: “Small businesses have a huge role in the recovery of the economy; by creating new products and services, they are providing employment and creating opportunities. With the volatile nature of the economy, the ability of small businesses to evolve fast and adapt to change is essential both for survival and to achieve the best positioning for their customers. With the opportunities created comes hope, and out of hope comes confidence; and that is the mix that will really get the economy going again.”
Rowan Gormley - Naked Wines
co-founded online wine retailer, Naked Wines
in 2008. Prior to this, he had founded Virgin Money
, the Virgin One Account and Virgin Wines
for Richard Branson. Naked Wines is an online market for wine, its community of more than 100,000 customers support over 38 local winemakers who then provide them with exclusive wines at preferential prices.
Gormley notes that his greatest challenge remained: “Convincing complete strangers to support winemakers they'd never met, to make wines they'd never tasted. Which we overcame by putting the customers in charge of selecting the wines we buy and the prices we charge.”
Adding: “The role of small businesses in terms of economic recovery will be key. Richard Branson always told me that his greatest asset was that he never had his instincts educated out of him. Small businesses will lead the next recovery, just like all of those before, because they are run by people who follow their instincts.”
Neil Norman - Human Recognition Systems
In 2001 Neil Norman
founded Human Recognition Systems (HRS)
which builds biometric people identification solutions for a number of industries around the world.
Today Human Recognition Systems is the foremost independent biometric solutions provider in the UK with four out of the five largest deployments being underpinned by HRS technology.
Prior to establishing HRS, Norman spent seven years at global management consultancy Accenture
taking on senior roles in a number of key sectors, with special focus on technology strategy.
Norman explains:“Maintaining the belief, cohesion and moral of our people has, and continues to be the main challenge with the backdrop of economic uncertainty in the UK. As a leader, I see the recession as an opportunity to remove weak competition from the market place and strengthen our position with customers. However, many employees who have never experienced a recession, especially not one as deep as this, often interpret changes in strategy as a worry, raising questions, as opposed to a re-positioning of the company in anticipation of the new market place.”
Concluding:“Small businesses will be the engine room for growth into the future. What is often overlooked in the current recession is that unlike other recessions of the 80’s and following the dot.com boom, this recession will result in a complete restructuring of the economy with much lower debt-financed growth and a greater dependence on innovation and entrepreneurial businesses. When the recession bottoms out in the coming 18 months and certainty returns, the businesses that have weathered the storm will outpace the larger companies and the individuals within those businesses will be grateful for the character-building experience they have gained.”
Michael Phillips - Broadbandchoices.co.uk
is the founder and managing director of Broadbandchoices.co.uk
, a multi-service price comparison site for consumers. Phillips has spearheaded the growth of Broadbandchoices.co.uk which has grown from a niche start-up to achieving turnover of circa £11m, leading to the company being listed 24th in the prestigious Sunday Times Techtrack 100
Phillips notes:“Finding good staff has, surprisingly, proven to be a big challenge. As a business that has grown strongly throughout the recession we have continued to hire new employees, but as other companies make redundancies they have held on to their very best staff. We’ve also found that good staff are reluctant to leave their current jobs in a recessionary environment which compounds the shortage of talented individuals to choose from.”
“We have had to be more discerning in the avenues we go through to recruit staff and in 2009 we completely overhauled our process of attracting talent and developing and retaining our existing employees.”
He adds:“Recessions are all about confidence – or a lack there of. Small business owners need to feel confident about the future; if they do then they’ll hire more staff; invest for growth; and generate the wealth that is so greatly needed to feed back into the economy. To that end the government needs to do everything it can to support small SME’s through legislation, tax incentives and less red tape so that it is easier for small businesses to establish themselves.”