More than two thirds of Kent businesses (72%) believe that a downturn in the UK economy would have a negative impact on their business, but 33% of those anticipating worsening conditions do not have a business plan that would prepare them to ride out a downturn.

The research from Business Link also found that more than two thirds (65%) of small and medium sized businesses interviewed for the quarterly South East Business Monitor expect economic conditions in the UK to get worse over the next year.

With the housing market suffering, businesses in the construction sector across the South East are more likely to believe that an economic downturn would have a negative effect on their business with 24% believing it would have a strong negative impact. However, those in the business and financial services sector are less likely to believe that a downturn would have a harmful impact on their business (62% compared with 68% across all industries), possibly due to the fact that many companies in this sector are focused on the business-to-business markets and do not rely on the economic health of the consumer.

Business Link’s Bob Jones said: “Although not all businesses in Kent will be affected equally by the economic downturn, most are worried to some extent so now is the time to take action and protect your company. We work with more than 25,000 businesses and aspiring entrepreneurs across the county and our experience shows that growing companies are much more likely to take time out to plan for all eventualities. Those who plan should be better equipped to weather a storm.

“There are steps that can be taken to make battling a downturn in the economy that bit easier. Having a sound business plan in place is an excellent start and can allow companies to plan for various scenarios. You may need to think about improving cashflow, diversifying, exploring new markets, becoming more efficient, or focusing on your business’s unique selling point such as the quality of your customer service.

“Even if you have a business plan, it is vitally important to review it. We have experienced Business Link advisers that can sit down with you and go through your plan step-by-step, act as a sounding board and provide a structured action plan to ensure that you are doing all you can to protect your company. As this is a free service, you really have nothing to lose.”

Companies can take immediate action to protect against an economic downturn by ensuring that they have sound credit control systems in place. Research conducted for the automated bank clearing service (BACS) suggests that ensuring prompt payment from customers remains a key issue for small businesses during economic uncertainty. The average small firm is owed £30,000 in unpaid invoices, with 29% of businesses surveyed believing they would go bust if they were owed just £20,000.

Bob Jones continued: “Having a good credit control system is vital to ensure a healthy cashflow. Our research suggests that 44% of small and medium sized companies already consider ensuring prompt payment to be a challenge but with the current uncertainty, it will become even more important.”

To access advice on a wide range of issues affecting your company call the Business Link Customer Service Team on 0845 600 9 006.

Business Link also has guides to help companies beat the economic downturn, available online or by calling the Customer Service Team. Topics covered include managing cashflow, increasing efficiency and debt recovery. Also available online is the Business Health Check tool which is designed to help companies analyse their finance and administration systems by answering a few simple questions. Visit businesslink.gov.uk/southeast/creditcrunch for more information or call 0845 600 9 006.