How bad’s it going to be..?

OK, it’s got to be faced – there is going to be some sort of slowdown in the UK. The Prime Minister will say it’s largely because of American influence, which will be largely true, but will we care? The fact is that we’re going to be finding things tougher, Northern Rock support or otherwise. Evan Davis has an excellent analysis of what’s gone wrong on his BBC blog.

The question therefore isn’t whether things are going to get tight – it’s how bad it’s going to be and how we can cope. My own answer is to look at this guide from the Times and apply as many of the principles as you can. It’s prudence, Jim, but not as we know it, you might say.

For example, how many business insurances do you have that are actually over the top and unenforceable? If you’re one of the self-employed population like I am then many of the employment interruption style of insurance will almost certainly not be worth having – you’re only unemployed when your employer lets you go, and if you’re self-employed then you can only let that happen deliberately. Likewise the insurances for illness and long-term disability – check your life assurance, you might already be covered.

Check also any purchasing plans you might have in place and how necessary they actually are. Managing debt in business is actually easier than in your personal life as you won’t have the same emotional attachment to your outgoings – it should be simpler to make ruthless decisions to force your business to work.

The most important point, though, is to remember that a slowing of growth isn’t a recession. Forecasts currently suggest that we’re going to grow 0.5 per cent instead of 0.7 per cent. This is not, repeat not, a reason to panic.

Guy Clapperton is a freelance journalist who specialises in small business issues and has written for the likes of The Guardian, the FT and the Daily Mirror. Guy has written about finance and franchising for SmallBizPod. http://www.guyclapperton.co.uk