The Cayman Islands is globally known for its finance and corporate law industry but the small and medium-sized enterprise (SME) industry is just as vital to its economy. Two disastrous years of pandemic and now the cost-of-living crisis has disproportionately affected small businesses. Russia’s attack of Ukraine has had a ripple effect too as the world enters a recession.
Small business survival in a recession is difficult but doable, as many enterprising Cayman entrepreneurs have proven. SMEs are the backbone of the global economy, according to a recent update from the World Economic Forum.
Many of Cayman’s small businesses are bars, restaurants, dive shops, car rentals, retailers, pool and landscaping services and tourism-related companies. Thankfully, the Cayman Islands has a robust small business sector and there is plenty of evidence of that as we pull together in an admirable community spirit.
Small and micro businesses such as ice cream trucks and roadside jerk stalls are at least surviving if not thriving in the Cayman Islands and they are an integral part of our business community. Buying local and supporting small business has a drip down effect that directly benefits locals and expats alike. Cayman has robust copyright laws to protect intellectual information. There are also strong laws to protect digital media, artistic works, music and people and organisations that hold patents.
SMEs create close to 70% of jobs and Gross Domestic Product worldwide. But, amid warnings of a global recession, research from the World Economic Forum and the National University of Singapore Business School indicates “that 67% of executives from SMEs cite survival and expansion as their main challenge.”
As a small business owner, there are ways to prepare for a recession. One is to keep a laser-sharp focus on cash flow, making sure to invoice quickly and review expenses more regularly than normal. Another is to consider how to best serve clients in an economic downturn. Keeping tabs on inventory and staff efficiency is a must too.
Perhaps there are ways the business can adapt its services to offer products that may help clients more effectively during a recession. Focusing on providing value and considering what customers really need is essential too. Not only will this increase an SMEs chances of survival, helping its customers helps cement those relationships and position the business for growth when the recession has passed.
1. So in summary, the most important things a business should do during a recession to ensure longevity and end up better off in the long run are:
2. Focusing on optimum efficiency at every level
3. Finding its most profitable activities and doubling down on them
4. Emphasise delivery and client retention
By focusing on these three things the experience of surviving a recession and even thriving after it becomes a lot more palatable.
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