Businesses to run in a recession: part seven

Read part one, part two, part three, part four, part five and part six

19 VirtualisationIt’s the technology buzzword of the moment but what does it mean? “Say you have four servers running, each performing a different function; now imagine you could consolidate all four into one machine, with reduced electricity and manpower costs,” explains Tim Danton, editor of PC Pro magazine. “That’s virtualisation.” Currently, American corporations like VMware have the monopoly on big business, but entrepreneurs like Sher Syed, founder of £500,000-turnover IT firm 360, have found their niche implementing virtualisation for small businesses. “Lots of SMEs are looking to consolidate their systems,” says Syed. “The UK is always slower to embrace technology than the US but it’s the only way forward.”20 Family businessesIn a global report entitled Family Business: In Safe Hands?, Barclays Wealth polled 2,300 wealthy investors, of which almost 300 were family businesses. The results show that family businesses, with their long-term approach, adversity to risk and closely knitted management teams, are the firms best-placed to weather a downturn. Åsa Björnberg, family business researcher at London Business School, agrees. “Family firms create a competitive advantage through their legacy. By promoting the bond between the individual and the family business, business-owning families are creating a specific form of social capital. This provides the link between past and future, enabling stewardship, shareholder support and long-term vision.”

21 Repairs and maintenanceWhen people are strapped for cash, they’d rather get things fixed than buy new. Sukhpal Singh, founder of Euro Car Parts, the UK’s largest supplier of replacement parts, says: “People are focusing on saving money by fixing what they have rather than buying replacements; in the car market more than any other. This year, new car sales are expected to be the lowest for almost 20 years. Instead, people are either going to cheaper independent garages to get their cars fixed or buying the parts to fix their cars themselves. Last year, our sales went from £118m to £145m largely because of people tightening their belts.”

Related articlesBusinesses to run in a recession: part oneBusinesses to run in a recession: part twoBusinesses to run in a recession: part threeBusinesses to run in a recession: part fourBusinesses to run in a recession: part fiveBusinesses to run in a recession: part sixPicture source

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