Top Midlands entrepreneurs see the credit crunch as a new opportunity for growth, according to research from Ernst & Young.
Its research found two out of three top entrepreneurs in the regionthought the global financial difficulties had not had any significant effect on their businesses, and many added the increased opportunities for mergers and acquisitions could even be a bonus for them.
Businesses queried in the survey said the current economic climate gave them opportunities to acquire targets at lower costs, broaden their customer bases, and spot opportunities to enter new markets created by the financial uncertainty.
Roger Medwell, of Coventry-based NP Aerospace – a manufacturer of specialist engineering materials and various industries and an Entrepreneur of the Year finalist – said the ‘go-getting’ drive of entrepreneurs meant they would ride out the financial storm.
He said: "I’m not surprised by the survey results. Entrepreneurs are go-getters, they will not be sitting back feeling comfortable, they will be out there driving and fighting for business.
"Difficult trading conditions undoubtedly creates business opportunities for the brave, particularly with regards to mergers and acquisitions.
"However in my experience, the key to staying afloat in turbulent times is to ensure that you build as much defensibility in to your business as possible.
"NP Aerospace has been protected from the credit crunch by a solid and growing client base. We are a niche business and supply clients in industry sectors which rely on long term investments decisions, such as the defence and medical sectors, rather than the mass market. As such we are less sensitive to short term fluctuations in the economy."
The survey was carried out by Ernst & Young among the regional finalists of the firm’s Entrepreneur of the Year awards, to find out what the impact of major issues facing SME owners were.
Recruiting and retaining the right people continues to be one of the top challenges the respondents cited facing their business in 2008, along with pressure from competitors; the rising costs of materials and production; the current exchange rate; and difficulties in securing funding.
And while the top entrepreneurs see the credit crunch as an opportunity, the majority of business owners are still nervous about the future of global finance.
The latest confidence survey by Bank of Scotland Business Banking found more than two thirds of business owners in the West Midlands expected economic conditions to get worse over the next 12 months, more than twice as many as the year before.
A spokesman for Bank of Scotland Business Banking, said the ongoing turbulence in the financial markets had taken a huge toll on the confidence of entrepreneurs.
But he added there was still a "fundamentally sound environment" for small businesses, and that the UK was still one of the best places to start and grow a business.
Ronnie Bowker, senior partner at Ernst & Young’s Birmingham office said: "The winners in this economic climate will need to keep their eye on the ball and be able to spot risk and take advantage of opportunities that inevitably arise when the market is tough.
"The region’s entrepreneurs must be on top of their debt facilities, be highly aware of their liquidity and stay close to their bankers. They should also look at what shape their suppliers are in, especially if they are heavily reliant on one or two."
The South region Entrepreneur of the Year awards will be held tomorrow night at the London Hilton Metropole Hotel.
Six of the West Midlands’ leading businessmen are up for the award, including Mr Medwell; Alan Malik, managing director of Exasoft; Richard Harpin, chief executive of Homeserve; Chris Kelly and Chris D Kelly of Keltruck and Peter Robbins, managing director of Probrand.