How SMEs are surviving the recession
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Thursday, 25 February 2010
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Small and medium-sized business owners are changing products and services and, where necessary, working longer hours to combat the effects of the recession, the Centre for SME Research says.
The centre surveyed more than 1400 businesses and found 53% had introduced new or improved products and services to survive the global downturn.
Increased sales efforts were made by 44% of businesses and 48% of owners reported working longer hours.
Yet, just over a quarter of the businesses say they have felt no negative impact from the recession.
The survey, conducted as part of the Centre's annual BusinesSMEeasure, aimed to find out how firms had adapted to the recession and how it has affected performance. The findings are being compared with results of a similar study in Britain to try to identify successful strategies.
By 2008, a third of the businesses reported feeling the first effects of the recession and, by October last year, this had increased to 69%. However, 26% reported that they had not yet felt the effects of the recession.
For most, but not all, sales are declining and the pace of the decline is picking up. Half of the businesses said second quarter sales in 2009 were worse than first quarter sales the previous year. However, one in five businesses bucked the trend and reported sales increases.
Centre director Professor David Deakins says the findings show the "remarkable" resourcefulness of New Zealand's small and medium-sized enterprises.
"Strategies that businesses are introducing to combat the effects of the recession are contributing to their resilience."
At the Finance 2010 event last Thursday, Finance Minister Bill English noted that New Zealand businesses had coped better with the current downturn, despite it being much more significant globally, than that of the 1990s.
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