Small businesses learn to thrive in a recession: Israel’s story

Gradually, the global economy is emerging from the credit crunch; a few banks lighter and several extra charity cases, but the worst is probably behind us.

At the beginning of the downturn, many predicted that the small could not and would not survive. In many cases, the opposite has been true.

I just watched a fascinating interview with Theo Paphitis, owner of the stationary chain “Rymans” and key figure on the TV show “Dragon’s Den”. He says it all. Emerging from a recession is all about converting failure into a success. You do that with passion, delivering quality to your customers.

And which groups often possess these skills? Your small enterprise, your family business, your entrepreneur – all these people have deep inner determination to steer an organisation through a financial crisis.

“Banjo & Matilda” is not a familiar household name to many. This Australian company has built up a successful on-line cashmere sales operation from nowhere, aimed clearly at the luxury market. 2009 was a good year and 2010 is shaping up well.

Personally, I am working with several small companies in the Jerusalem area who have turned themselves round in 2009. The recession forced them to focus, a painful but necessary lesson in disguise. In some cases there were layoffs, but those who remained have been rewarded for loyalty.

Similar stories have reached the national press. The clothing company, “Jump”, was close to liquidation. It was sold to a competitor and is now looking to open up stores overseas. The country’s vibrant cleantech sector has come of age in the past 12 months, and you can check back for my comments on Leviathan, Solaris and Cequesta to name but three. 

Maybe Israel’s SMEs have an unfair advantage over their counterparts overseas. After all , the country has spent over 60 years coping with political adversity. Evidently, it is learning to exploit this “toughening up process” towards a commercial advantage.

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