Earlier this month, a survey by the Chambers of Commerce reported that business leaders believe the UK is facing a serious risk of recession.

Not surprisingly, small and medium-sized businesses feel vulnerable with fewer customers coming in through the door, and with those who do spending less. In this situation, cutbacks are inevitable.

Traditionally, the first casualty is marketing – or, as Sir Alan Sugar refers to it, the "spending department". But to survive the downturn, don't abandon the marketing – focus on it instead. Make sure every pound works the hardest it can.

Marketing isn't about cherry-picking a big London agency to spend millions filming a television advertisement in the Bahamas. It is about communicating the right message to the right people in the right place and at the right time.

And when money's tight, any marketing budget must be spent very wisely.

Start with research. Analysis of who your target market is could cost £10-20,000. But research will save you a lot of money in the long term. There's no point in putting your whole marketing budget into a campaign which misses the mark, speaking to the wrong people or delivering the wrong message.

Research can define where the majority of your business is coming from, and, in turn, assist you in protecting that core source of income. Are your existing customers aware of the breadth of your services or products? Getting existing customers to use you more is quicker and cheaper than finding new customers.

Equally, how are your existing customers being affected by the current economic climate? Rather than focusing on quality or benefits, should you be reminding customers that you're the cost-effective alternative?

Once you're clear and confident who your target market is, it's essential that your campaign reaches them. Find an agency which understands that every pound must work as hard as possible and that being wasteful isn't an option. The likelihood is that a smaller agency will be more accustomed to working cleverly with smaller budgets.

The multimedia revolution of recent years has opened up a number of new marketing channels which can be used to create cost-effective and cleverly targeted marketing campaigns. E-marketing could be just as effective as television advertising. Mobile marketing could speak to your potential customers at a relevant time and place.

Direct marketing could create a faster route to sales generation. Find the option that delivers most effectively within your budget and keep monitoring your campaign to ensure it's still working.

When there's the threat of a recession, it's time to assess spending decisions, and that includes how the marketing budget is being spent.

However, it's not the time to cancel all marketing. Instead, take a targeted approach and make sure that each pound spent is working to protect your business for the short and long term.

An agency called england employs 60 people in two offices in Leeds and Canterbury, Kent.

Richard Midgley, managing director of an agency called england