Life remains tough for many of Britain’s tens of thousands of small businesses as the recession continues to force consumers to cut their spending, but there does appear to be some light at the end of the tunnel.

The Barclays Local Business Survey, which was launched this year and is being run in conjunction with The Times, is now at the halfway mark.

More than 3,600 business owners have now taken part and an analysis of the first 2,000 responses to the survey suggests that the situation for most small businesses is not worsening. Many appear to be preparing to grow when the economy rebounds.

While 34 per cent are planning to remain the same size or consolidate, 51 per cent indicated that they were planning to expand in the next 12 months. One respondent said: “We are working hard to increase our customer base to replace some of the lost revenue. We believe that when the upturn happens we will gain a double-whammy of benefits: old customer spend will recover and new customers will become even more valuable as they will also increase their spend.”

The findings indicate that many small business owners remain confident about the continuing viability of their businesses.

Simon Payne, who runs a company called MediaDISC Multimedia in West London, which offers duplication services for the music industry, is one business owner who responded to the survey at timesonline.co.uk/yourbusiness. His clients include record companies that need copies of promotional CDs and DVDs to send to radio stations and reviewers. Mr Payne said that the downturn had prompted customers to haggle more and seek better deals. As it is a niche industry with a limited pool of potential customers, he had increased his networking efforts to promote the company further. “I’ve been getting out there and seeing more people in an effort to get the name out there more,” he said.

Staffing levels for the company, which was set up nine years ago, have remained unchanged at seven people. However, a steady stream of work has prompted Mr Payne recently to take on a new member of staff.

The Barclays survey finds that attracting new customers is the No 1 concern for business owners, cited by 44 per cent of respondents. Perhaps unsurprisingly, many are finding it difficult to do so. “We are just not seeing as many potential customers either visiting us or viewing our website,” one respondent said. Another commented: “It’s been hard to get new customers this year and the old ones aren’t spending as much.”

In an attempt to drum up new leads, many small business owners have been changing their marketing strategies so that they are better targeted and more cost-effective.

In many cases, that has meant a move away from print media, such as newspapers or flyers, to online avenues, such as website advertising and e-mail campaigns. “To date, we have relied upon our reputation, but now believe we have to be more proactive,” one respondent said. The stress of trying to find new customers, boost marketing activities but at the same time keep a lid on costs and try to secure credit has taken its toll. Only 35 per cent of respondents feel that their business affects their life in a positive way, compared with 56 per cent who say that it has a negative effect. Ensuring a good work/life balance was the issue most on the mind of only 16 per cent of respondents, with a mere 2 per cent answering making time for family.

Asked to sum up the experience of running their own business, 42 per cent said that it was hard work, yet the second most popular response (30 per cent) was that doing so was rewarding, with 16 per cent saying it was fun.

One issue that has not changed is the ability of small businesses to borrow money, an essential requirement for both survival as well as growth. A third of respondents say that it will be very difficult to get finance this year, with a further 39 per cent expecting some degree of difficulty.

The survey will continue until the end of October and we will continue to share the results.

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