The power of being small

I would have loved to have been a fly on the wall at the recent meeting between the Prime Minister and the heads of the banks, when I am sure he encouraged them to start lending to small businesses, using the money they have received from the taxpayer.

The charm offensive from the banks has already started; Lloyds TSB just launched its Charter for Small Businesses, including passing on interest rates cuts and running some business advice seminars. They promise that they "will agree to any reasonable request for short term finance and do what we can to support any viable business through temporary difficulties"; the other high street banks are making similar pronouncements.

I wonder if the high street banks realise that the attitude of many small businesses has changed while they have been away. As Peter Finch put it in the film Network "we're as angry as hell and we're not going to take it any more."

The current recession is not our fault; small businesses have not been greedy, stupid and poorly self-regulated. We suddenly find our credit squeezed and our customers delaying buying decisions. Our products and services are just as good; we find it very annoying that it is now harder to sell and deliver them, through no fault of our own.

But we entrepreneurs do not spend too long feeling sorry for ourselves; we just get on with business, mindful that it is only us that can save the economy. We are the people who generate taxation revenue, not the ones that just spend it on what we often regard as poorly executed initiatives.

We understand that 'boom and bust', is how the economy works, regardless of what we might think about it. The more sensible of us saved our cash during the boom times and are now developing new business ideas during the recession when opportunities abound for solving customer problems while staff, offices and raw materials are cheap.

Being small, we can move swifter than our less nimble opposition. For example, if retailers are in trouble, this is a great opportunity for us to provide clever sourcing and local home delivery. There are bargains to be had everywhere; we can provide them to our loyal customers.

We have looked at the high street banks and have decided we would like to deal with them in a different way than before. When they effectively shut up shop to very early stage entrepreneurs, we moved to a 'cash and barter' economy. While interest rates are low, many entrepreneurs are bypassing the banks and storing their cash under the bed. No wonder it is claimed the Prime Minster is planning to print more money; he is probably running out of bank notes.

The banks will therefore face a much more difficult and competitive market when they return to the game. Entrepreneurs realise that all the high street banks are essentially identical with very similar services and interest rates; we will therefore shop around and go for the one that we like the most.

So the challenge for the banks is the same challenge as for us entrepreneurs; to be liked more than the competition. Their famous brands have been devalued by their own hands, so it is down to the individuals we meet in our local branches, how much we like them and feel that they understand our businesses.

The writer is a best-selling author, keynote speaker and entrepreneur mentor, co-founder of Beermat.biz, an online resource for entrepreneurs.