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Praise for companies' entrepreneurial spirit
DRAGONS' Den star Peter Jones said he was encouraged by research showing that entrepreneurs were taking action to fight the recession.
Online small and medium-sized enterprises are cutting back on non-essentials to survive the recession, according eBay's second online business index.
Rather than cutting jobs, they are slashing their other forms of spending. The survey dubbed these types of firms as Hoots, because their attitude is "helping ourselves outta this" in the absence of sufficient help from lenders or the Government.
Of those online SMEs questioned, 35 per cent said they were altering their stock, 26 per cent reducing office costs, 22 per cent advertising costs and 20 per cent shipping costs.
The research, involving 458 firms, also claimed that the Hoot spirit promised growth in the sector with two-thirds (66 per cent) of online businesses ordering up to 30 per cent more stock for this Christmas than they did last year.
It also showed that 69 per cent of online businesses feel confident about their outlook for the next three months, although in Yorkshire this was lower than the nationwide average.
Fifty-seven per cent expect their sales to go up over the next three months – up 4 per cent on last quarter – and 76 per cent achieved their sales targets in the past three months.
Mr Jones said: "It is extremely encouraging to see these entrepreneurs taking a proactive approach and shaping their own destiny. It's exactly this type of entrepreneurial spirit our economy needs."
The research also showed that pressure on profit margins has eased with a 12 per cent fall in the number of online businesses expecting their margins to be squeezed over the next quarter.
Prices are also said to have stabilised, with 66 per cent – a rise of 10 per cent – expecting their prices to stay the same during the next quarter.
Some analysts are claiming that the worst of the recession has not been felt and the eBay research showed that online businesses could help to drag Britain back in to growth. Forty-one per cent of these firms are looking to hire staff.
But online SMEs say they are still being hit by a lack of banking credit, with one in six having to delay expansion. The same number of firms claim that their banks have failed to pass on the recent cuts in interest rates.
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Sunday 12 February 2012
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