Entrepreneurs see opportunities in economic downturn

The latest in a string of surveys suggests that although business confidence is at a three-year low amongst entrepreneurs, nearly half remain positive and believe that a recession could actually present fresh business opportunities.

Business confidence falls

The Tenon Forum study shows that 61% of entrepreneurs are positive about the year ahead, compared to 86% last year and 78% in 2006. In additional, the number of owner-managers who are making solid plans to weather an economic slowdown has climbed from 70 to 85%.

Examples of such preparations would include: cutting down on non-essential expenditure such as entertainment, placing a freeze on hiring new employees, and better servicing of existing clients to gain a competitive advantage.

Entrepreneurs still upbeat

In spite of all the doom and gloom broadcast with seeming glee by the mainstream press, almost half of the entrepreneurs surveyed remain positive (47%) and believe that a pending recession may provide new business opportunities - such as winning clients from competitors, and even the chance to acquire less fortunate rivals who may become victims of the "credit crunch".

When it comes to seeking opportunities in the downturn, those who have previous experience of economic downturn seem more upbeat than those who haven’t. Half of those who’ve experienced recession can see potential opportunities, compared to only 43% of those who haven’t – implying that this experience is boosting entrepreneurs’ confidence when it comes to staying afloat.

Commenting on the research, Carl Jackson, Head of Tenon Recovery, said:

“With so much talk of recession in the media, it’s not surprising that entrepreneurs are feeling relatively downbeat, compared to the last two years. It is, however, very encouraging to see that entrepreneurs are aware of the opportunities for their businesses and a significant proportion are actively seeking opportunities during the downturn.

“However, entrepreneurs do need to be vigilant when it comes taking risks in the face of a potential recession. By ensuring they have robust business plans in place, SME owners should be able to see their business survive and thrive through the tough times that may be ahead.”