Recession ‘a new experience to some small firms’

Many small and medium-sized businesses in the UK have never before experienced anything like the current recession, one commentator has stated.

Unprecedented levels of deflation are leading to operating costs for such companies to fall sharply, however many firms are still feeling the pressure, it has been revealed.

According to More Than Business, managing workforce numbers has become an issue of focus, which may lead some companies in the UK to consider redundancies.

And while the research shows that the costs of running a small business has fallen to -1.4 per cent over the first quarter of 2009, demand for goods and services has also dropped significantly.

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Commenting on the research, head of More Than Business Mike Bowman said: "The volatility has made it very difficult to plan and invest, placing tremendous pressure on cash flows and managing stock and staffing levels."

He added that there were a lot of small businesses that had never experienced anything like the current economic downturn before.

The Trades Union Congress recently revealed that unemployment is likely to rise in 2010.