Medical and Healthcare Business Reacting Bullishly to the Credit Crunch
SummaryDespite the pressures, medical and healthcare businesses appear to be reacting bullishly to the credit crunch according to a new study released today. When asked if they had to start their business again in today’s economic climate, 78% of medical and healthcare businesses would do it all again tomorrow.
The study is based on detailed online interviews with 117 small and medium sized businesses. The businesses were drawn from across the UK and from a mix of sectors.
In general, the study paints a picture of an SME community in bullish mood. Just under half plan to expand into a new area in the next 12 months and a further 37% will recruit new staff. Over one in three plan to launch a new product or service and only 1% plan to scale back their operations. Indeed when asked to state their future optimism, over four fifths (89%) of medical and healthcare businesses said they were confident about the future of their business.
The survey highlights a real audience split with some SMEs noticing the effects of the credit crunch on their business and others seemingly untouched. For instance, the report showed that 28% say that they are now finding it harder to borrow from the bank, whilst 38% of respondents from the same survey admitted to not noticing the credit crunch.
However, there is no doubt that some SMEs are feeling the pressure of the credit crunch. For instance when asked what changes their business had noticed in the last 12 months, the top response with 56% was that suppliers had increased their prices. With other half of suppliers increasing their prices this will have a huge impact on the supply chain, affecting further businesses throughout the UK.
Despite being under pressure from suppliers, many feel unable to increase prices with their own customers, especially as many are facing weakening demand. Only 18% say customers are buying more on credit, and over half of SMEs (55%) admit that their customers are more and more frequently looking for deals or asking for discounts.
Kamala Panday, Publisher of Credit Today, organisers of The Credit Show comments: “For some, the credit crunch is beginning to bite. However this survey shows that their hunt for growth has not been affected. Businesses are now playing a more strategic game, with over half admitting to chasing slower payers more vigorously.”
“What’s encouraging to see from our point of view is the increasing role that the credit control function is playing with the SME strategy.”
Indeed with over half of SMEs saying that the credit control function has become more important, and with 30% tightening their grip on their credit control function through introducing stricter credit terms, credit issues have never been as important as they are today with SMEs.
Through further analysis of the findings by business age, the report identifies how the value of experience cannot be overestimated. Businesses that have been operating for more than 3 years and have perhaps experienced previous tough times are more cautious about over-stretching themselves and are acting in a more responsive manner. For example 61% of these businesses are chasing slow payers more strongly, almost the same number see the control function as an important part of the business (59%), and they are far more likely to take non-payers to court than those running younger businesses.
On the other hand SMEs who have been operating for less than 3 years are more focussed on moving into new markets and recruiting new staff (49% and 43% respectively).
Kamaly Panday adds: “This is great to see from young businesses. However these businesses need to take care; the flip side of this expansion is greater business exposure, which could cause problems considering the current climate. If they are going to move into new markets more actively, they should do so with good credit management procedures in place. Otherwise they could come unstuck.”
“At the Credit Show this year we are more focussed than ever on the SME community, and this report will help us shape and develop the Show even further. In general, the overall picture is one of optimism, and it’s great to hear of the bullish mood that SMEs are in today, especially as they are such a vital part of the UK economy.”
To download a copy of The Credit Show’s ‘Credit Crunch and its impacts on SMEs 2008’ report, visit www.creditshow.co.uk
For further information, please contact:
Kelly Stanley, Credit Show, 020 7940 4835, Kelly@credittoday.co.uk
David Barrett, Energy PR, 01993 823011, firstname.lastname@example.org