Sep 24, 2008

When it’s tough the brave thriveBy Jenny LittleThisIsMoney.co.uk

England — Running a business is in Mark Fletcher’s blood. His mother owned a series of cafes and there is a long family tradition of running shops in the East End of London.

So when Mark, 31, opened his Fig 1 ethical gift shop in Totterdown, south Bristol, a year ago, he was surprised to find how much the first year of trading had to teach him.

‘I was realistic about the pressures of running a business, but I had no idea just how important cash flow management was,’ he says. ‘It affects your day-to-day operation, especially when you’re establishing new relationships with suppliers and planning to buy stock.’

The credit crunch also brings new concerns for beginner bosses alongside the perennial challenges of organising finances, handling red tape and marketing the business.

However, a downturn rarely leads to a decline in the number of start-ups, says Stephen Alambritis of the Federation of Small Businesses – partly because higher levels of redundancy see more people going it alone.

Website getsetforbusiness.com conducted a poll of 200 business owners who had established their companies in the past six months and found that many had been inspired to work for themselves by the fear of redundancy.

Alambritis says: ‘Start-up rates always stay fairly level, between 450,000 and 500,000 each year, but when times are hard there is a change in the type of new business.

More tend to be lifestyle businesses based on an interest or hobby and many owners will remain sole traders.

Read complete article.