British businesses, still feeling the effects of recession, are ill-prepared to face a return to economic growth, even though they are aware of the need for action, according to a new study from Lloyds TSB Commercial.
The research reveals that 31% of firms have not taken any steps whatsoever to prepare their business for the upturn, and even more (36%) don’t believe they need to do anything to ensure their business is ready to benefit as the recovery starts to gain momentum.
Amongst the 31% of firms that have not taken action to prepare for a recovery, 17% admitted that they had not even thought about the steps they might take, and yet there was widespread recognition (43%) that taking such steps would be essential if they were to survive in the long term. Almost half the firms questioned claimed they did not need any more help to prepare for the recovery.
A ‘wait and see’ attitude seems to prevail even though half of the businesses surveyed (51%) have seen the lead that well prepared businesses benefited from during the last recession. This attitude prevails despite widespread recognition amongst businesses of several risks which might leave them unable to exploit the upturn.
64% believe their business will suffer from low cash resources, while 23% believe depleted capital will be an issue. A similar number (22%) fear they will lack the capacity to meet demand for their products and services, while 13% are concerned about potential management or strategy gaps.
Those businesses that have started to prepare for recovery are clear about the importance of taking action. 66% say they need to act now in order to benefit, while 42% say they don’t want to lose out when the recovery arrives. A further 14% say they learned their lessons in the last recession.
The steps taken by those firms who have begun preparing is varied. 27% have sharpened up processes and working practices, and the same number have made efficiency improvements. 10% have sought additional funding, while 6% have boosted research and development efforts. Small but significant numbers (5%) are working to establish international networks, with a view to improving export prospects. The same numbers are looking more closely at the opportunities presented by the green economy.
John Maltby, managing director, Lloyds TSB Commercial said: “Recession has weighed heavily on UK businesses and it is easy to see why talk of a recovery might bring welcome relief. But in the same way that we have encouraged firms to take action to survive the downturn