Natural selection is not only confined to the theories of Darwin according to a new study which has unearthed a new breed of recruitment business owner, fit to survive the current recession and well into the future.
The research, from leading independent invoice financier Bibby Financial Services, revealed that these 'super entrepreneurs' are evolving because of the downturn, with 72 per cent of those in the recruitment sector making, or planning to make, positive steps in order to survive and face economic uncertainty head on.
Cash is king when it comes to this new business breed with 53 per cent of owners and managers in recruitment claiming the recession has encouraged them to keep a closer eye on their finances. With seven in 10 firms experiencing a deterioration in their ability to access finance, it's easy to see why issues surrounding the management of late payment and improving cash flow top the priority list. .
The figures also show flexibility is key to survival with 82 per cent of these owners and managers also making positive changes specifically in relation to their clients/customers and suppliers. Of those businesses evolving, 61 per cent have managed to pursue new business opportunities, and over half (53 per cent) have been able to negotiate better terms with their suppliers. In addition, 33 per cent have become more open and transparent when it comes to their business plans with clients and customers alike, resulting in a new flexible and more honest breed of business owner and manager.
However, as well as the positives, many recruitment businesses are having to resort to more drastic measures when it comes to surviving the downturn. Thirty one per cent are cutting their marketing or advertising spend and 27 per cent are even going as far as to use their personal savings to ensure the existence of their business. Furthermore 23 per cent are, sadly, scaling back on production and 27 per cent are having to bring services back in-house.
Edward Winterton, Recruitment Finance specialist for Bibby Financial Services said: 'This research highlights the flexibility and diversification tactics that British businesses are being forced to learn in order to survive the downturn. With so many businesses taking positive steps to adapt to survive, it's clear that stronger, more experienced entrepreneurs will emerge from these tough times. The message to those who are not taking proactive steps is that this is no time to be complacent - reviewing suppliers, finances, and in particular cash flow even now may prove vital to the survival of many of the UK's small and medium-sized recruitment businesses.'
The figures also show there is no substitute for experience - over half (54 per cent) of business owners and managers have never experienced a prior recession or downturn. But it is business owners who have ridden out past downturns who are more likely to be scrutinising their finances more carefully, with 81 per cent of businesses paying more attention to finances compared to just 64 per cent of those who've experienced this recession only. However, 35 per cent of those who started their business in the last three years know they need to develop their understanding of financial management.
Edward Winterton added: 'There's no doubt times are tough for recruitment businesses. Many will simply be fighting for survival rather than being able to take the time to look at what changes are necessary. However, even just taking a few minutes a day to look at the business in a fresh light and explore any potential new survival strategies could mean the difference between having a successful business in a year's time or not.'