It may be time to get ready for a recession, at least the British Camber of Commerce seems to think so. While this is a statement for the UK, I’m almost certain my readers in other parts of the world could be affected as well.
Until now small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal businesses, have not been very affected by the changes in interest rates in the country. However the increase in rates of interest is set to pose a risk for small businesses in the U.K. and economic activity is expected to slow down towards the end of the year and small businesses need to brace themselves.
The British Chamber of Commerce noted that the increase in interest rates five times in the last years will drag down the GDP growth and economy and one more rate increase is forecasted before the end of the year.
“The cumulative adverse effects of five interest rate increases since August 2006 are set to worsen over the next year, as the pressures facing consumers and businesses intensify,” commented the economic adviser to the BCC, David Kern.
The BCC has brought to the governmentís attention the impact of any further increase in interest rates on small business and hopes that it will take adequate steps to support entrepreneurs.
It is time to focus on activities that would increase sales and revenue and should avoid increasing your fixed costs for the next 12 to 18 month – to see how things are going to work out. Using outsourcing and bootstrapping techniques are one way to keep your cost variable.