UNDERSTANDING BUSINESS

Understanding Business

Abstract

During a deep recession in the early 1990s (Makunnas and Maliranta, 2003) studied job and worker flows in the Finnish business sector. The data set covers effectively the whole work force. The gross job and worker flow rates were found to be fairly high. The evidence suggests that the adjustment of labor input has happened through a reduced hiring rate rather than through an increased separation rate (Kocak and Edwards, 2005) explored the importance of entrepreneurial behavior and inter-firm co-operation for small firms seeking growth in a volatile, recession-hit environment.

Table of Contents

Overview on recession4

Global Recession - Tough Times for Small Businesses5

Theoretical framework6

Understanding Small Business Financial Statements8

Organisational environment9

Technical environment11

Small Business Help to Survive Global Recession13

Small Business Marketing Strategies14

Conclusion15

References16

Understanding Business

Overview on recession

Inter-firm co-operation includes both horizontal and vertical relationships (Kambil, 2008), examined how managers can respond to recessions and navigate their companies to success looking at the last two recessions in the US and found those organizations that sustained their focus on revenue growth and market share, and where managers had broad mindset and considered a broad set of options for action were most likely to succeed, in contrast to those who did across the board staff and cost cuts (Finkelstein, 2008) explained how executives misread the competitive landscape, fall into the trap of believing in their own strategy in the absence of confirming evidence, and sometimes engage in desperate decisions to try to remedy fundamental problems that cannot be so easily resolved (Young, 2009) presented his views on how to survive a recession in the form of a list of basic principles to follow, such as, lower your outgoings, lower your stock holding, cash flows, hold your nerve and manage your people which he suggests might help save businesses. Further he suggested all industries, not to stop marketing activities as people tighten the string of their purses and existing customer base may shrink during recessionary time. So industry needs to continue investing in marketing activities to grab a share of this decreasing pie.

Global Recession - Tough Times for Small Businesses

According to the International Monetary Fund, the world is set to slip into recession in 2009. As global growth of under 3% is considered a global recession, the figures showing a 2.2% growth in 2009 indicate that it is on the cards for sure.

The global economical crisis has had a serious impact on the availability of credit throughout the world, but thinking about the effects closer to home, how is it affecting the average UK small business?

Britain cannot officially be said to be in recession until two successive quarters of negative growth have been recorded, so it will be January 2009 before it can be formally announced. But in the meantime official confirmation probably doesn't mean too much to any small business already suffering the effects of the financial slowdown.

As the global economy stumbles from one crisis to another, small businesses face the task of keeping costs down whilst trying to stay competitive and it is during these times that ...