But our Hot 100 entrepreneurs won’t go down without a fight. If anyone’s going to roll up their sleeves and battle through the recession, it’s this determined bunch. When we surveyed the business owners in the list, 76 per cent of respondents said they have kept or increased their sales projections, despite the current climate.
Mike Pickles, the 50-year-old founder of Yorkshire-based box manufacturer Really Useful Products (87th), saw the recession coming. “We do a lot of business in the States so we had a window into what was going to happen on this side of the pond,” he says. So he adapted his business model to survive the blow, cutting the firm’s product development budget from £1.8m to £250,000.
Ken Kelly’s been tightening his belt, too. Kelly made movies for five years before setting up The Furniture Practice (99th) in 1997. Today, his Clerkenwell-based company employs 14 staff and turns over £10m, working with architects and designers to furnish corporate spaces, health centres, hotels, apartments and schools.
“How am I making the business more efficient? Well, I’m working longer hours! We’ve also slashed our marketing budget,” says Kelly. “We used to take clients to the PalmerSport motoring event. Now, we’re treating them to barbeques on our roof terrace.”
Sally Bailey, chief executive of fashionwear chain White Stuff (88th), was also quick to respond to the changing climate. When she saw the retail sector collapse last year, she took precautions. “We began cutting back on stock last October,” she says. “But November sales were strong and, by December, we didn’t have enough stock left for a January sale!”
While unemployment has soared above two million – with economists forecasting that the number could reach 3.3 million in 2010 – eight in ten of our Hot 100 respondents said they hadn’t made any redundancies in the past 12 months. The Furniture Practice’s Ken Kelly tells us he “hasn’t let a single employee go”. Ronald Garrick, managing director of TWMA (45th) is actively recruiting. With disposal services in hot demand, he says he’s looking to hire another 20 people by the end of 2009.
Other Hot 100 entrepreneurs are making sure their balance sheets are rock solid. David Evans, the founder of performance improvement firm Grass Roots (86th), says he’s been storing up all the company’s wealth: “We have zero gearing. We don’t owe anybody anything. And we have tens of millions in the bank. That gives my staff confidence that we can ride over difficult times. Ironically, we’re picking up business like I’m putting on weight!”
Evans, who started the £284.3m-turnover firm back in 1980, says he keeps the company healthy with a “bonsai tree approach”. He explains: “If the business is getting out of shape, I trim it. I adapt the company constantly – there are no sudden knee-jerk reactions. And I always give my employees a longer-term perspective than the next six weeks.”
But that doesn’t mean Grass Roots is immune to the downturn. Evans admits that a couple of his big clients have toppled under bad debt. “There’s not much we can do about it. We can’t get the money back; we just move on – that’s life. And there’s nothing like a crisis to train up our younger employees. It’s not just the fittest companies that will survive this recession, it’s the most adaptable.”
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