Small Business Financial Crisis And Survival

Small Business Financial Crisis and Survival.
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Table of Contents TOC \o "1-3" \h \z \u Small Business Financial Crisis And Survival. PAGEREF _Toc530833680 \h 3Executive Summary PAGEREF _Toc530833681 \h 3Analysis/Importance Of The News PAGEREF _Toc530833682 \h 3Justification of the Study PAGEREF _Toc530833683 \h 4The Economic Implications Of The News PAGEREF _Toc530833684 \h 5Approaches To Dealing With The Problem PAGEREF _Toc530833685 \h 61. Strengthen themselves in technology innovation as well as marketing activities PAGEREF _Toc530833686 \h 62. Short reporting cycles. PAGEREF _Toc530833687 \h 73. Cash generation PAGEREF _Toc530833688 \h 74. Increased staff monitoring PAGEREF _Toc530833689 \h 75. Tight budget control. PAGEREF _Toc530833690 \h 7Literature Review PAGEREF _Toc530833691 \h 7Lessons Learned and Recommendations PAGEREF _Toc530833693 \h 8References PAGEREF _Toc530833694 \h 10
Small Business Financial Crisis and Survival
Executive Summary
During a recession or slowdown, most management experts usually advise people to quit jobs and start a business. The idea of becoming an employer and not an employee can be too tempting especially for people who are having some financial crisis. Upon this thought, many people will put their foot down and decide to take the plunge (Altinay 24). With the vision of earning more money, many people will start drafting their business plans and if need be present them to the relevant investors so they could get the necessary funding. Small businesses appear to be doing well for the first months apart from the money does not flow as one expected, the interests on loans keep swirling up, investors asking for their money back and to make matters worse, IMF predicts some global slowdown. Before, embarking on starting a business, it is imperative to come up with ways that will assist you to mitigate financial challenges which are prevalent in small enterprises.
According to a study conducted by Enterprise Research Centre, it shows that some small and medium-sized businesses survive financial crisis while others do not. In Europe, 99 per cent of firms are small and medium-sized businesses, and they offer employment to about 70 per cent of the population (Berry 455). This paper will analyse the financial crisis that faces small businesses in the UK and the approaches that they put in place to assist them to survive and remain resilient in spite of the financial challenges that they encounter.
Analysis/Importance of The News
A press release titled Why do some firms survive a crisis and others don’t a study conducted by ERC was recently released. The article captures the reality of this challenge and stipulates the details of the financial crisis during 2008. During this time, The Federation of Small Business estimated that almost 50 companies would close daily in the UK while others survived and more SMEs kept emerging and currently, there are more SMEs than ever with FSB reporting 5.7 million in the previous year 2017 (Biggs 645).
The two-year research which was supported by JP Morgan of Chase Foundation involved 3000 SMEs been surveyed. In this study, SMEs are defined as...