Small firms fighting the downturn

The BBC News website is tracking nine small businesses from across the UK to see how they are being affected by the economic downturn.

Over the coming months we will be revisiting them at regular intervals to see how they are getting on.

Jenny Lees produces dental products for both dentists and the public from her base in Preston-on-Wye, Herefordshire.

She employs five people at the company, which has an annual turnover of between �300,000-�400,000.

JENNY'S OCTOBER REVIEW Confidence in the business - 7/10 Key current concern - Change in rates and fate of UK manufacturers

"At the moment, sales are holding up well, probably due to the type of products we produce and sell.

Where I have seriously felt the pinch is with a product that I can only source in the Far East.

Earlier this year, I asked for quotes to restock the product this autumn.

When the pound started falling, I held off placing the order in the vain belief that the currency might get back on its feet, but sadly it hasn't.

So I now have a bill to pay for this product of �11,700, which, if I had paid back in April, would have cost �5,916."

David Groocock runs the St Maur Hotel on the Isle of Wight (IOW), which has an annual turnover of �200,000 and employs six people.

He is a member of the local chamber of commerce and the chairman of the IOW tourist board.

DAVID'S OCTOBER REVIEW Confidence in the business - 5/10 Key current concern - Bank support for small businesses

"The challenges lie for me in getting through the winter period.

I already plan to give discounts at the hotel for November, January and February to try to entice customers.

We are closing on 1 December for five weeks and during that period, all the bills still need to be paid.

It's even more of a concern this year, because banks are being so careful in their lending right now.

On the plus side, prices have gone up for holidays abroad, so we should benefit from more people choosing to stay within the UK."

Carl Bradley runs a computer shop with his wife in Eastbourne, East Sussex.

He employs three people and the business has an annual turnover of �540,000.

CARL'S OCTOBER REVIEW Confidence in the business - 7/10 Key current concern - the flow of customers drying up

Mr Bradley says he is being greatly affected by fluctuations in the currency exchange rates.

"I buy most of my stock in US dollars and have really felt the slump in the pound.

For example, a laptop I was selling at �300 should really be increased to �350, but if I was to do this, then customers just wouldn't buy.

That is the thing that's hitting me the hardest - the currency exchange rates.

My sales haven't really decreased, and footfall into the shop is the same.

It's just the increases in fuel over the past few months, the increase in energy costs and the drop in the value of the pound has seen my margins cut.

My biggest outgoing is the business rates. I would like to see them frozen, if only for a short while, so I get a breather."

Mark Stimson is a director at BPL Solicitors in Dorchester, Dorset, which specialises in property law.

The firm has an annual turnover of �2.5m and there are just under 40 employees.

MARK'S OCTOBER REVIEW Confidence in the business - 6/10 Key current concern - the availability of cash

"We have had to cut staff by around two-thirds and now employ just under 40 people, as the volume of work has just dropped off a cliff.

We had to take such drastic action to put in place measures that could see us through the recession.

The main cause of the downturn for us is the lack of availability of mortgage products, which has really slowed down the process for people who would have moved or remortgaged their properties.

In order to try to increase our market share, we have decided to embark on an aggressive marketing campaign, and are in the process of recruiting staff to undertake telesales, which is something we haven't utilised on previous occasions."

Leo White runs a design company in Cumbria.

He employs five people and has an annual turnover of �250,000.

LEO'S OCTOBER REVIEW Confidence in the business - 8/10 Key current concern - recruitment, being able to find quality staff

He deals a lot with small start-up companies, and has around 120 clients on his books at the minute.

"One of the main types of business we work for are quality food producers, which Cumbria is renowned for.

I do have concerns that the luxury food market might be a sector that could suffer, but think my business model should see us through.

I still take on about two or three new clients a month, but I have had to put plans for an expansion on hold as I don't want to commit to anything more in the current climate."

Harry Murray runs a manufacturing company that makes wooden staircases and other architectural features in Newcastle-under-Lyme, Staffordshire.

Employing 25 people, HMS Joinery has an annual turnover of �1.7m.

HARRY'S OCTOBER REVIEW Confidence in the business - 7/10 Key current concern - More support needed from banks and the government to support small firms

"Within the last few months, the company has had to lay off nine people, as the slowdown in the building sector has had a huge knock-on effect for us.

We have had to move the focus of the business to the top end of the market, and we now get commissioned for bespoke work from people who want something designed and made for themselves.

There's still money out there - but it's not spread out as much.

Our relationship is a little strained with the bank at the moment, as they are unwilling to extend any overdraft facilities.

This is making the cash flow situation quite difficult."

James makes and sells high-end grandfather and grandmother clocks in Armagh, Northern Ireland.

He employs five people and the clock-making company has an annual turnover of �180,000.

JAMES' REVIEW OF OCTOBER Confidence in the business - 8/10 Key current concern - currency fluctuations

The clocks retail from �1,660 to �10,000.

"We have noticed a definite slowdown of enquiries over the last few months.

The currency fluctuations have affected us and has caused us to try and find alternative markets.

We used to sell a lot to America through exhibitions etc, but now we sell a lot to Russia.

Recently we changed our bank of more than 50 years, and have since saved �1,500 in charges alone in one year - the equivalent of five people's wages for a week.

We think we will be able to survive the slump, but hope it won't last too long."

Steve Valentine runs a confectionary factory which produces a range of chocolate and fudge products, as well as rock and sweets sourced from the local area, based in Gwynedd in Wales.

The factory has 27 employees.

STEVE'S OCTOBER REVIEW Confidence in the business - 8/10 Key current concern - the drop off in retail sales

"Our order books are full up to Christmas, and I know from experience that trade shows in January-March will see more orders flood in.

People will always want chocolates for Valentines Day and Mother's Day.

I think the reason we're doing so well is that people will always want a treat, no matter how much they're feeling the squeeze."

Mike Grant runs a residential and commercial timber lodge manufacturer in Perth, Scotland.

There are 21 people employed in the company, which has an annual turnover of �2m and produces about 30 lodges a year.

MIKE'S REVIEW OF OCTOBER Confidence in the business - 7/10 Key current concern - Nothing in particular at the moment

"I have noticed that inquiries have been getting slower this year, although our order books are full for the next six months and of course, we hope to get more orders in before the six months of work is up.

"We are in the fortunate condition where we have cash in bank.

I think we are well insulated from the downturn.

We don't need a big market share to keep us busy."

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