End of the recession? It's barely half-time
- 08 Mar
Neil Edwards, Managing Director of The Marketing Eye, looks ahead to the Budget on 20 March and calls for measures that deliver hope and confidence above all else.
With another Budget day on the horizon, small business owners will oscillate between hope and barely disguised resignation.
As much as we all yearn for specific provisions to ease our path, what we really need is a Budget that delivers more hope and confidence than any Budget has ever done before.
A 10-year recession
The recession is showing all the signs of being a 10-year downturn. We started The Marketing Eye in early 2008 - just when the recession is said to have started. Back then, we expected it to be like any other recession - a year or two at most. We were prepared for it and we planned for it.
Now it seems we are barely halfway through. As time has gone on, the glass half empty economists that we ignored and derided at the time have proved themselves right - well almost...
Reading back through The Marketing Eye blog, which has recorded Budgets and Elections since 2008, I was mildly amused to see a comment in October 2008 by Tom Vosa, who, at the time, was Head of Market Economics UK at National Australia Bank. He described then as 'the end of the beginning of the credit crunch'. He was wrong of course - it was still the 'beginning of the beginning' as the latest Finance for Lending Scheme figures released by the Bank of England last week have confirmed. Net lending to cash strapped businesses and households is down by another £2bn.
Small businesses are on their own
There is little point in complaining as it seems no one in Government truly understands or is listening to small businesses. Small business owners are now accustomed to recession and because we are a spirited and resourceful bunch, we have learned to work within it. We can't, however, keep battling against a constant sense of the world sliding backwards.
Recent budgets have promised much for the small business, but have spectacularly failed to move the dial for the majority. Enterprise zones, breaks for research and development, and incentives for exporters are laudable, but bypass established, non-technical, domestically focused businesses in the South East of England like The Marketing Eye - the so called engine room of the economy.
Proper, meaningful breaks on the costs of employing people, a return of the relief on Corporation Tax on small profits and zero rated VAT on marketing materials would leave vital working capital within businesses, encourage them to employ more people and make promotional activity more affordable for the newest and smallest enterprises.
Marketing a path to survival
On past form, the likelihood of any of these measures happening seems slim. Left to our own devices, we must develop reliable brand promises in order to survive and ultimately thrive.
In times of uncertainty, customers seek the reassurance of brands they can trust. Businesses that focus their marketing efforts on demonstrating transparency and giving outstanding customer service will win trust and maximise new and repeat business.
By focusing on our niches, getting closer to our best customers, making sure we have terms of business in place, having the courage to say 'no' to customers that abuse our trust in them, and maintaining our marketing efforts to maximise brand loyalty we will all be doing everything we can.
Nothing is guaranteed, but this seems to me to be the best way to prepare for another tough five years ahead.