Smes Swimming In Credit-crunchy Waters

The global crisis is affecting small and medium sized enterprises from all over the world. However, company owners can help their business grow through an effective online marketing strategy. AssetTrader explains how.

Unlike the big automotive giants in trouble, they do not usually make newspaper headlines. According to European standards, their staff is made up by no more than 250 employees, and their annual turnover doesn’t exceed 50 million euros. We are talking about the backbone of many economies: small and medium sized enterprises. SMEs are suffering heavily from the credit crunch, because they are finding it hard to obtain the necessary funds for promoting their growth and development. As an effect of the crisis, banks are tightening their lending policies, sometimes choosing to support the bigger corporates only. Some participants in the financial game claim that this strategy is not effective, due to the importance played by SMEs within the framework of European economy. In fact, they make up an impressive 99% of companies and they account for 80% of employment in certain sectors, including textiles.

Financial group Close Invoice Finance has completed a study on UK-based SMEs from a range of sectors - hotels and restaurants, finance and property, manufacturing and retail, and so on. The data that emerged from the polls doesn’t look good: 40% of business owners in Northern Ireland claimed to be more stressed, and 20% reported a deterioration in their work-life balance. Most of them are cutting down expenses on ‘luxuries’ such as Christmas parties, client entertaining and bonuses. At the moment, it seems that small and medium sized enterprises are engaged in a serious struggle against the global crisis.

However, there are signs that some banks are ready for intervention, especially in areas where SMEs are absolutely vital to the local economy. Central and Eastern Europe is a good example. At the end of 2008, the European Bank for Reconstruction and Development announced a € 100m loan to Banca Transilvania to promote lending to Romanian SMEs. The European Investment Bank has decided to increase lending to European SMEs by 50% to €15bn through 2010. Some governments, such as the Czech Republic, seem willing to increase their financing programs to help company owners to keep their businesses running. The situation is not so different in Asia, where several countries are reporting a major rise in loan applications. In Singapore, local banks have registered a boom in requests for loans and loan top-ups, following the Government $2.3bn initiative to ease the impact of the credit crunch on small and medium sized enterprises.

It is crucial that financial aid measures are put in place to ensure the survival of many SMEs. However, it is even more important that company owners themselves work towards a defensive strategy to beat the credit crunch. Quite often, business managers bring down their advertising and marketing budget as a last resort to save the boat. However, this measure is a false friend: it might save you cash in the here and now, but it can prove itself disastruous in the long run. If you fail to perform the necessary market research and advertising strategy, you will not be able to reach the right audience with the right message at the right time. As a result, given the circumstances, you will sink below your competitors. On the other hand, if you do your marketing homework, chances are your business will grow stronger than ever.

Marketing your product online is particularly vital for SMEs. Other than being cheaper than print or television, internet advertising allows you to target your audience much more specifically. This is especially true if you rely on a service that performs Search Engine Optimization and offers you global visibility on the World Wide Web. For instance, if you are a busy company owner and you need to sell your agricultural or industrial machinery online, you can rely on B2B portals such as AssetTrader. This London-based virtual marketplace can bring your business to the attention of the entire world through a network of multilingual websites. Registered users can count on a range of customized services: dedicated account manager, mini-website for your company, multilingual support, press info on industry trends, spam filter and manually verified leads.

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