12 October 2009

A survey published today by Deloitte, the business advisory firm, reveals that entrepreneurs are evenly split in their opinion as to whether the worst of the recession is over for their business. Deloitte polled over 50 entrepreneurs during a breakfast seminar at which James Caan, leading entrepreneur and Dragon’s Den panellist, and Keith Willey, Associate Professor from the London Business School, discussed the challenges facing entrepreneurs in the present business climate.

The snapshot of current entrepreneurial sentiment reveals that:

• 35% believe the worst of the recession is over, whilst 35% disagree;
• 86% believe their business will emerge stronger from the recession;
• 80% say that steering their business through this recession has made them a better entrepreneur;
• 80% say the downturn has provided new business opportunities for them to exploit; 13% have not seen any new opportunities for their business.

Debbie Griffiths, entrepreneurial business partner at Deloitte, comments: “The results of our poll provide a very interesting barometer of current confidence levels within the entrepreneurial business community.

“The speed at which an entrepreneur-led business can react is often the key to success. Indeed, 80% of those polled say there are a lot of new opportunities in the market place for a versatile entrepreneurial business to identify and exploit. However, for many the end to the economic uncertainty is still some way off and when a recovery does appear, the economic environment is likely to be radically different to the past.

Keith Willey says: “Many larger businesses are currently internally focussed, which presents numerous opportunities for entrepreneurs to fill that gap in the market, which is often in a niche area.”

James Caan adds: “As with most businesses, entrepreneurs are having to make some very tough decisions to reduce costs and bolster their balance sheets, whilst also trying to retain and motivate their top talent. Offering key employees a piece of the action is arguably one of the best motivational tools available. This demonstrates to that employee their importance to the business, and secures long term commitment.”

Debbie Griffiths notes: “One way to achieve this is through, for example ‘growth shares’, which does not necessarily dilute existing shareholder value. There are some attractive tax advantages when compared with cash remuneration too, particularly with the introduction of the 50p tax rate from 6 April 2010.”

Ian Stewart, chief economist at Deloitte, adds: “Entrepreneurs remain deeply divided on the outlook for recovery. There is no consensus among smaller businesses on the recovery. This uncertainty tends to fit with the views of central banks and policymakers who remain overwhelmingly cautious about prospects for recovery.

“The malign effects of the recession are very obvious and well understood. But what comes out of our poll is that the downturn has also created new business opportunities for entrepreneurs. Far from laying the smaller and growing businesses to waste, 86% of entrepreneurs in our poll believe that their businesses will emerge from the downturn even stronger."