Braxxon is having to adjust yet again in the face of a sudden freeze in
spending, but the company has learnt its lesson. “The banking crisis we are
in now is not dissimilar to the one we suffered in the early 1990s. This
time it hit hard very quickly and almost stopped us in our tracks,” said
Renardson.
The solution once again has been a drastic one. “Everyone is on
performance-related pay. In 2001 the directors took a 50% pay cut and
everyone else took a 25% pay cut. We have written that into all our
contracts and we are having to cut pay again until things recover. Nobody is
happy about it but the priority is to protect jobs.”
Actress and businesswoman Jane Asher also learnt some hard lessons trading
through tough times soon after launching her decorative-cake business in
1989. “It was an incredibly difficult time to start, although I didn’t know
it at the time as it was my first business. We opened just as the recession
was about to bite,” she said.
Asher had borrowed £80,000 from her local bank. “It was a real struggle. I
used to lie awake at night not knowing if we would be able to pay the
interest on the loan.”
Today the business is profitable and sales have grown steadily to £750,000 but
costly mistakes during the recession held the business back, she said. “I
wasted a lot of money on silly things like an expensively produced leaflet
for a business that was doing well on word of mouth.
“I also underpriced my products. They are more like sculptures than cakes, but
it took a long time until I sat down and worked out our overheads and how
many hours it took to make each one.
“I realise now that we made a common mistake. A lot of people feel they should
lower their prices when times are tough but in most cases the opposite
applies. If you raise prices you have to serve fewer customers and you need
to do and spend less.”
Asher struggled through hard times without assistance. “Looking back I wish I
had sought advice earlier from somewhere like the Federation of Small
Businesses.”
Skidmore agrees that the best thing struggling owner-managers can do is look
for help. “Don’t feel you are fighting the world alone. There is lots of
support out there, so use it. There is coaching and mentoring, support from
regional development agencies and Business Link — help that was not there 10
years ago.”
