Experimental feature

Listen to this article

Experimental feature

As many business owners have been worrying about their future, a number of entrepreneurs are calling for their peers to see the silver lining in the dark clouds.

This week has seen little to be optimistic about for company owners struggling to renegotiate debt facilities with their banks. The government’s announcement of a forum between high street lenders and small business to try to hold up lending to the sector has been criticised as too little too late for those small business owners who have been refused emergency overdrafts or had banking facilities withdrawn.

Many small businesses have already been put into bankruptcy because of what they claim is no fault of their own and bank bosses admit that more business failures are inevitable.

However, several entrepreneurs now argue that what does not kill them will make them stronger.

James Hibbert, founder of Dress2Kill, a London-based bespoke tailoring service, only managed to renew his overdraft facility with his bank after agreeing to “every guarantee under the sun”.

He recently decided to close his West End shop, consolidating operations at his base near Waterloo station, when the landlord tried to tie him into a longer lease. But he claims trade has been brisker than ever in recent weeks and that the downturn has created “huge” opportunities for his business.

“There is far too much negativity,” he said, adding that he is launching a website to reach people who cannot make it to his shop. “It is a golden opportunity to make your business leaner, get rid of the excess fat, be more competitive and make changes,” he said.

James Murray Wells, who started online spectacle retailer Glasses Direct with the last instalment of his student loan, said he was glad his business no longer needed angel investment, where funding has become much harder to secure.

Freed of this concern, his company, which offers lenses at a fraction of the cost of high street opticians, is picking up sales as
people trawl the web for bargains.

“It may even be the catalyst for us to have an accelerated growth period if it prompts people who weren’t so cost conscious to get more frugal,” Murray Wells said.

Start-up numbers usually rise during recessions as those made unemployed from salaried jobs seek a means of covering mortgage payments and basic bills.

James Caan, an entrepreneur and presenter on BBC’s Dragons’ Den, has launched a campaign to garner government support for these early-stage ventures, such as tax breaks for family and friends who lend money to start-ups.

“In a tough market you need to give them a lease of life,” he said, noting that clear incentives were more likely to change behaviour than the vague promises given so far on bank lending.

“The government should be doing this because otherwise these people will be on the dole.”

Copyright The Financial Times Limited 2017. All rights reserved.

Follow the topics mentioned in this article

Comments have not been enabled for this article.