The increasing number of companies looking to raise their marketing spend in 2012 is evidence of the ‘first shoots of the economic revival’, according to a London-based entrepreneur.
Will Davies, co-founder of property maintenance company Aspect.co.uk, believes the growth of businesses in the capital will be key to the economy’s recovery.
“The fact that they (London firms) are increasing their spend suggests there is movement and the growth of London businesses will help drive recovery forwards. London will lead economic recovery and growth in London businesses will be a central to that,” said Davies.
Companies have faced challenges during the recession and the following choppy recovery, but Davies believes the business community does not need to be all doom and gloom.
“The downturn clears out competition and promotes efficiency so that in theory the best businesses make their way through it and ultimately we are left with the business most likely to be successful in pulling the economy out of recession.
“This is slightly unfair as there will be lots of good businesses that don’t make it through, but as a general rule the downturn will create market capacity for successful firms to take from competitors who have fallen by the wayside.”
Davies’ own company, based in Earlsfield in south west London, has looked to manage its growth during the downturn. The company anticipated problems getting customers to pay on time and the dangers of bad debt.
“The temptation has been there to continue to grow at circa 50 per cent per annum as we were previously and the business was there to support this, but from a cash perspective we decided to pull the reins a bit and reduce growth to circa 20 per cent per annum.
“We were realistic in predicting customers to pay more slowly and bad debt to increase so we have been careful to make sure that we haven’t overstretched so we could handle the cash flow impact of those forces.”
The government has been at pains to show it is making the effort to get young people into work in recent days. Davies believes the young people his company have encountered roughly fall into two categories.
He said: “The downturn has meant there are large numbers of young, skilled labour who are looking for work and as a result we have taken on some excellent new people. However, we have also seen a fair bit of apathy in the young labour force and I am sure that there are plenty of good people sitting at home waiting for the recession to end before they start looking for work.”
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