Crunch 'worrying', but 'tough' SMEs are coping

Small and medium enterprises (SMEs) are finding ways to cope with the worsening credit crunch, the Federation of Small Businesses (FSB) has said.

And 'tough' small business owners are finding new ways to deliver a profit, the federation adds.

The upbeat message comes in the face of the ongoing credit squeeze, and after news that this week's fuel price protests have spread into continental Europe.

"Small businesses are under severe pressure financially," said FSB financial affairs chairman Mike Cherry. "Credit is drying up, big companies are taking longer to pay their bills and fuel costs are having a massive impact on the bottom lines of businesses in almost every sector."

"But small business owners are made of tough stuff," he added. "Agile entrepreneurs are finding new ways of targeting customers, changing the focus of their output or breaking into new markets altogether."

Earlier this year, the federation advised small firms to consider diversifying the goods or services they offer, to ensure regular cashflow using factoring if necessary, and to minimise outgoings. In a press release today, the FSB provides three examples of businesses that have changed their focus in response to the worsening economic climate.

"Yes the credit crunch is a worry, but it is great to see that small business owners can still find ways of making the best of a tough economic climate," Cherry added.