Economic conditions forcing business collaboration

Economic conditions forcing business collaboration

A report released yesterday entitled “Collaborate UK” contained some interesting information for anyone involved with the micro business sector.

According to the research conducted by Professor Robert Blackburn at Kingston University, two-thirds of SMEs in the UK have been forced to change the way they work in response to the poor economy. A quarter of those surveyed were now more inclined to work with other businesses than they would have been before the recession, and 14% of them actually have a partnership now as a result of the downturn.

Surprisingly, 1 in 8 of the 700 businesses in the survey would now even work together with a competitor if it was beneficial to them!

The report also identifies a new breed of ‘Size Zero’ businesses that have removed all the non-core functions from their business. 2.8 million SMEs have embraced outsourcing and the projected mean spend on outsourcing for 2013 is £143,000 with 18% planning to increase the amount they spend. The mean number of services outsourced is five and the East of England leads the way on outsourcing with an average of £203,000 spent.

Half a million small business barter their services for the service of other businesses in lieu of payment and over a quarter of those surveyed work with other businesses to obtain sales leads and win new business.

It seems like the recession has radically altered the way that small businesses work together. Perhaps you have had to change the way your business operates and work with other businesses in the local area – how are you finding it?

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