So, here we go. Strap yourselves in. Put your tray tables in the upright position, put your head between your legs and kiss your arse goodbye… recession is on the way as the economy goes nosediving into the ground.
But does it have to be this way? We have a great habit in this country of talking ourselves into trouble. Business confidence is an intangible, but heavily relied on barometer of the state of the economy, which can do more damage than any of the indexes, graphs and charts rolled out by economists and the media.
Don’t get me wrong, I am not a fantasist. No successful entrepreneur can afford to be. I am a realist, and one with enough experience of previous downturns to know that it is the nation’s SMEs that are the key to getting us through this current situation.
I have traded through four tough recessions, the first coming just a year after setting up Pimlico Plumbers in 1979, through to the most recent, but shorter six months recession during the pandemic in 2020. Without doubt the 90s recession was the most challenging period of my time running Pimlico. The trade totally went, and it sent us as low as we could go and we owned people money.
It looked like we were going out of business, but we fought our way back, changed a lot of things and cut our cloth accordingly to fight our way back.
The attitude we showed wasn’t unique and I truly believe it’s inherent in the majority of business owners across the country and they will be required to pull on every sinew to get themselves, and therefore, the wider economy through this.
Of course, each economic disaster has its own characteristics, and this one is no different and probably puts more pressure on small businesses than previous downturns.
The double whammy of spiralling energy costs – even with the introduction of a price cap for businesses – and less money in the pockets of customers impacted by the cost-of-living crisis, makes this particularly scary for many small firms.
But this is where the true grit of British entrepreneurs shines through. We work hard to keep the food on the table of our families, and the families of our employees. We adapt, we pivot, and we press on.
We have more than five million small and medium sized businesses in the UK, which are the backbone of the economy and their fearlessness in the face of this storm will be key to returning this country to prosperity.
But like all the best entrepreneurs who surround themselves with the best people, UK SMEs can’t do it alone.
For many, the Government’s belief that ‘trickle down’ economics will be an economic saviour is wide of the mark, and scrapping the cap on bankers’ bonuses will just have infuriated SME owners fighting tooth and nail to keep their heads above water.
In the last major recession, back in 2008, the then-chancellor George Osborne proved to be a friend to small business, realising their worth to the economy.
He gave SMEs the chance to survive, maintain workforces, cut out some of the red tape and, ultimately increase revenues, which meant, a greater tax contribution to the Treasury.
The current chancellor needs to take the same approach. Giving SMEs a fair playing field to go attack the economic downturn is a must.
Once Kwasi Kwarteng has cleared up the dog’s dinner of recent weeks he and business secretary Jacob Rees-Mogg have to make SMEs their priority and allow entrepreneurs do what they do best.