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The Eurocrisis continues to drag on, and it seems that things are getting worse by the week.
As Greece edges closer and closer to exiting the single currency, there are genuine fears that Spain, Portugal and Italy may also follow suit at some point in the future.
Greece leaving, which seems increasingly likely, will set a dangerous precedent which could have incredibly damaging consequences for the UK’s economy.
Once again, small businesses are likely to take the hit for things completely out of their hands.
But how exactly is the current crisis likely to affect your business?
The obvious fear is that another financial catastrophe will follow. Considering we’re currently still in a recession, and are a long way from recovery, throwing another crisis on top of that will be the final straw for many.
As the countries are all tied into the Euro, their economies are all deeply entwined. The demise of one country’s situation has knock on effects that primarily affect the other countries in the Eurozone.
As the Eurozone has a large influence on global economics, it’s clear there is a lot at stake.
Of course if your business deals with European clients directly, or exports goods to the continent, you will continue to face issues if the situation continues to deteriorate.
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If you’re one of the many people struggling to get by running your business, you may be interested in this Guardian article by Simon Jenkins.
In it, he argues that the country is being turned into a 'Detroit UK' by the current economic policies of George Osborne and David Cameron.
Jenkins says the measures put in place by the Government only served to cut off growth, and worsen the impact of the 2008 credit crunch.
In the aftermath of the crisis, the government made heavy cuts, while pouring money into the banks.
Most businesses will still tell you that getting business loans from banks is nigh on impossible, so where did this money go?
With Britain back in a recession - a possibility that many warned of as the austerity measures were announced - it would be hard to argue that Osborne's decisions have been successful.
The article came a day before the Queen's speech, which promised that the battered government would get the country moving.
Ed Miliband criticised the speech, saying, "for a young person out of work, this speech offers nothing.”
The government will stick to its guns over the economy, so we can only hope it will pay off in the end.
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The Daily Mail reports that the government is expected to announce that they have learned from their losses across the country.
They intend to create more jobs and give business extra help to battle against the lingering tough economic conditions that are holding many companies back.
Announcing voter pleasing policies, they are looking to crack down on reckless behaviour in the banking sector while also reducing the numbers of businesses facing bankruptcy measures.
Meanwhile The Guardian raised some interesting points about how little the major banks seem to have learned from the crisis in 2008.
We are now back in a recession and small and medium sized businesses are continuing to suffer because of the actions of the fat cat bankers who brought the country to its knees.
We'd love to hear how you're dealing with the tough times and whether you're feeling sceptical or encouraged by the Tories decision to focus solely on economic recovery.
Leave a comment below and let us know how you're coping.
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Here at the BusinessFinance.org blog, we’re always on the lookout for new tools to make the lives of small businesses owners that little bit easier.
That’s why our ears pricked up when we saw Yahoo advertising their new marketing tool, aimed directly at small businesses.
The new tool comes free of charge and analyses things such as website traffic and online reputation, as well as providing news from Yahoo’s small business service.
The toolbar also comes with paid tools that business owners may consider investing in.
This type of concise data can prove invaluable for new start ups and established companies alike. Being able to dissect whether the capital you are sinking into marketing strategies is getting results is a very useful service indeed.
Marketing is likely to be part of any small business finance package. To get your brand out there and compete against the big boys, people need to know your name.
We’ll be testing out the new tool from Yahoo to see how it works and whether it is likely to benefit small business users – so check back for an update at some point in the near future. Read more...
After most experts predicted that the UK would avoid a double dip recession, last week brought the news that all business owners have been dreading.
The UK’s economy is now officially back in recession. Not only that, the Prime Minister is warning us that things are likely to get worse.
Spain has followed the UK’s slide into a double dip recession and the Eurozone crisis is now firmly back onto the agenda.
Cameron today predicted that we have not even reached the midway point in the crisis, warning that we should be bracing for more bad news in the coming months and weeks.
This paints a bleak picture for those who need to find business finance, but how long is the UK’s recession going to last?
The silver lining on the cloud is that this recession is unlikely to be especially damaging. The economy shrank by 7% in 2008, and it should be nowhere near that bad this time.
The likelihood is that we will exit as soon as the next figures are released. What is more alarming is that the economy is not expected to grow very much over the next 12 months.
Hopefully the Olympics will give the boost that businesses desperately need. Read more...
Following on from Wednesday’s news that the UK’s economy is officially back in recession, businesses are likely to continue to struggle for at least the foreseeable future.
At a time like this it’s worth considering other, alternative points of views. It would be difficult to argue that the current economic system is sustainable considering the amount of innocent businesses and individuals are currently being subjected to. According to
Steve Keen, an Australian alternative economist, there is an alternative. In this fascinating interview on the BBC’s HardTalk, he explains his way of dealing with the economy.
In the video, he claims that we need to effectively start again. He says that bailing out the banks is ineffective as they do not pass that money on through lending.
They simply sure themselves up and leave everyone else to struggle. Getting hold of business loans in the last few years has been very tough despite the bailouts.
What Keen suggests is to bail out individuals and businesses instead, dramatically reducing private debt.
Everyone would receive a payout which they would have to use to pay off any debts. The banks would still receive money through repayments and everyone’s a winner.
Would it work? Who knows, but it’s becoming clear that the current system needs changing. Read more...
Over the last few months we’ve seen constant speculation over the state of the UK’s economy. Recent figures suggested that things were picking up and that we were going to steer clear of a double dip.
Those hopeful predictions were dashed earlier today as the figures released showed that the UK has officially re-entered a recession.
A heavy 3% drop in the construction industry is being blamed for the second consecutive contraction in GDP.
The recovery since the first financial crisis has been sluggish, but many expected the UK to escape a technical recession.
DAIWA Capital Markets compounded the bad news by predicting a growth of 0% for the rest of the year.
The public are also reacting badly to the news; this reader’s poll in The Guardian suggesting that this recession is likely to be even more damaging than the 2008 one.
The news will come as a bitter blow for business owners, who were just about beginning to see some light at the end of the tunnel.
With the Eurozone crisis also reigniting, it seems that business credit will remain incredibly hard to access. The banks are not likely to start lending anytime soon in these conditions. Read more...
The Internet has revolutionised the way that business is conducted. The ability to instantly communicate and access huge quantities of information has undoubtedly changed the business world irreversibly.
For many people, this development has made life easier and ensured that small businesses are able to compete with larger competitors.
On the other hand, the traditional high street is changing, as people now expect to find internet pricing in store.
The recession has seen this issue become even more pertinent, as more and more companies are forced to let staff go as they move online.
British Gas today announced that they are likely to lose 550 staff as a result of the changing digital landscape.
The company cited a change in the way that customers choose to communicate with them as a reason for closing their Southampton call centre.
Despite this news, there's little doubt that many established companies are successfully adapting to this new digital landscape.
Opening a new business has never been easier, and you can easily find resources to assist you online. Business finance help is closer than ever and there are all kinds of specialised tools and software available that can dramatically increase efficiency. Read more...
Facebook is an increasingly omnipresent force in the news. The website is constantly at the forefront of privacy debates, for example.
It is also, however, an interesting case study in business. It will be interesting to see if a single social media website can maintain its dominant position for an extended period.
MySpace was once the dominant force, only to see its users slip through its fingers and its advertising income drop dramatically.
Facebook is aiming to prevent this type of mass exodus by constantly updating what it offers to its users. If you rest on your laurels for too long, it seems consumers will become bored and move on.
The recent purchase of the popular Instagram platform is an example of the company’s willingness to adapt.
According to this article, advertising on the platform has doubled in price, suggesting a surge in the company’s profits.
While Facebook’s cash flow will inevitably benefit from this kind of news, it will be interesting to see what happens when the company’s shares are floated later in the year.
The rise of Twitter could continue to cause problems for Facebook but, as of now, they have managed to maintain their position and ward off a back lash. Read more...
With so many young people currently unemployed, Job Centres across the country are struggling to cope with the numbers of people coming through the door.
So what’s the best way to get the young people of Great Britain working?
It’s a simple fact that there is a shortage of jobs at the moment. A logical solution would be to encourage young people to start their own businesses, or go self employed.
A modest weekly grant, perhaps even less than they would be paid given for signing on, would see young people taking back responsibility for their unemployment. This would in turn benefit the economy.
At present, to be eligible for the New Enterprise Allowance, you need to have been unemployed and on the dole for six months. This seems a bizarre restriction, and simply means that it makes financial sense for many people to remain unemployed until they are eligible for the programme.
Removing this restriction would be a good way to encourage entrepreneurship and get the economy moving.
Currently, young people who don’t want to be unemployed for six months will need to apply for business finance via the traditional methods.
Read more...
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