With reports on struggling Eurozone economies abounding and news continuing to warn industry of the repercussions on financial systems, you would expect the SMB sector to be particularly vulnerable to the knock on effects. Afterall they make up one of the parts of the economy that traditionally rely on banks for access to capital. It’s interesting then to note the results from Sage’s Business Index which shows only 19 per cent of the 10,000 plus small businesses polled citing lack of funding/access to capital was a problem.
Could it be that the SMB sector has simply learned valuable survival skills from the last financial meltdown and this time feel more prepared? With 69 per cent of small businesses polled for this second Business Index reporting revenues had either held steady or had grown over the last six months, despite fears this would not be the case– it would seem so, with the single exception of Spain where 44 per cent recorded a decrease.
According to this research, the biggest challenge faced by the majority of small businesses (47 per cent) in fact relates to rising costs – especially the cost of fuel and raw materials – a sure indicator that SMBs more than anything are looking at driving strategies of growth, innovation and sustainability that do not rely on bank lending practices.
Spain again stands apart with a quarter of Spanish small businesses citing lack of funding or access to capital, an indication that Spanish business owners are perhaps more reliant on banks to support growth and manage cash flow than in other regions.
Today the Eurozone hangs in the balance with doubts over whether the single currency will survive the storm, shepherding in the biggest challenge for Europe since the EU began.
All the more important to remember that in the Eurozone’s current predicament we are witnessing not an end but a beginning of new and different possibilities.