Online business thriving through the recession

Jun 18 2009 by Andrew Mernin, The Journal

DESPITE a lack of assistance from either the Government or banks, many online businesses are apparently finding alternative ways to elevate themselves out of the recession.

According to the Online Business Index, by auction site eBay, many digital firms have ensured a brighter second half of the year by cutting back on non-essentials rather than making redundancies or cutting staff benefits.

However, the report also says digital companies in the North East are the least sure of their future, with only 51% of respondents claiming to be confident about the next three months. This compares with 81% in the East, 90% in the West Midlands and 70% in the South East.

Many of these online SME businesses are altering their stock (35%), and reducing office costs (26%), advertising costs (22%) and shipping costs (20%).

Meanwhile, eBay predicts the buoyant mood among digital firms to last far beyond the summer, with around two-thirds of online businesses ordering 30% more stock for this Christmas than last.

In addition to this, 69% of online businesses feel confident about the outlook for their business over the next three months – up 6% on last quarter – and 57% expect their sales to go up over the next three months.

Entrepreneur Peter Jones, who runs Phones International Group and appears on the Dragons’ Den television show, said: “It is extremely encouraging to see these entrepreneurs taking a proactive approach and shaping their own destiny.

“It is exactly this type of entrepreneurial spirit that our economy needs in the current climate.”