SME perceptions of and responses to the recession

Abstract

PurposeThis paper aims to explore perceptions of the recession and recovery by SMEs in Lincolnshire and Rutland. The paper seeks to examine the relationship between businesses' perceptions of the economy and their growth ambitions.Design/methodology/approachThe results were generated from a bi‐monthly online survey of SMEs. The survey includes two years of data from July 2010 to May 2012, spanning periods of recovery and recession. The survey comprises a number of Likert‐scale questions which have been tracked throughout the period.FindingsThe findings suggest a separation of how businesses perceive wider economic conditions, and their role and performance within the economy. Views on trading conditions and public sector cuts are identified as a more important determinant of business behaviour than views on the economy overall.Research limitations/implicationsThe findings are based on research undertaken with SMEs in a specific geographical area of England and, as such, there is limited scope for generalisation beyond this area. Further research could compare the responses of SMEs in this predominantly rural area with metropolitan areas, for example.Practical implicationsThe paper highlights the importance of revenue sourced from the public sector for SMEs in peripheral areas. Policy implications include the need to support SMEs in identifying alternative sources of revenue and/or new business models in the face of reducing public sector expenditure.Originality/valueThe paper presents an innovative approach for analysing SME perceptions, the findings of which have informed a business support programme run by the University of Lincoln, and used as a benchmarking tool by participating SMEs.