Companies try to beat recession

Born in the Storm looks at three new businesses starting up in the West

Starting a new company in the recession may not be as mad as it sounds, as Dave Harvey, the BBC's Business Correspondent in the West, investigates....

Queen's Square is a fine sort of address for an ambitious Bristol company.

The regency offices are popular with lawyers, accountants, advertising agencies, you name it, but the corner café is closing down.

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Why? Just lift your eyes, and you see every sandstone wall holding a "To Let" sign.

One of the offices that is not available is home to a small firm that runs events and a website for new start-up companies.

Katie Moore, founder of www.startupcommunity.co.uk , has over 45,000 outfits on her books, and lately there has been something of a flood.

"Our membership has increased by a fifth in the last three months", Ms Moore tells me, "and for people with a great business idea, this really is their moment."

Dave Harvey is the BBC's Business Correspondent in the West

It is actually quite common for recessions to breed start-ups.

Some are created by people made redundant from bigger firms; people unwilling to sit and wait for the JobCentre to find them work.

Others are by entrepreneurs who take advantage of the flood of shops and offices on the market right now, often at knock-down prices.

"Recessions create start-ups", confirms Brian Steel, an advisor with the government's advice service, Business Link South West .

"Unfortunately, that flood is usually followed by a wave of business failures. People think they are immune to the forces that drove other firms under."

We asked Mr Steel and Ms Moore to check out three new firms braving the economic freeze in the west of England.

Gill Loates runs "Recession"

Gill Loats has flagrantly used the downturn as a marketing ploy, calling her second-hand clothes shop in Bristol 'Recession'.

She has another advantage over the competition. "Everything you see here is from orifices in my house", Ms Loats smiles, "so I have no stock costs."

Gill Loats has called her second-hand clothes shop "Recession"

Her home must have been something. The little shop is crammed full of vintage frocks, curious memorabilia, Dusty Springfield LPs, Roberts Radios, you name it.

She is banking, quite literally, on the recession creating a second hand chic.

Brian Steel is more interested in Ms Loats numbers than her pieces.

She had a good Christmas, it emerges, but so far she is not sure how much she is taking every week since.

Brian is worried. "You can't live on Christmas, Gill", he warns. "You need to know how much you take each week, and how much you need to break even."

Click here to see Gill's report.

Heather Marshall runs "Music Bugs"

Our second new baby "born in the storm" is a much less risky business.

All Heather Marshall needs is a steady supply of toddlers, and some parents desperate to get out of the house.

That, surely, is a market that weathers any storm.

Heather Marshall is running "Music Bugs" in villages around Bath

Heather's business is a music and fun class for 2-4 yr olds, which she's running in villages near Bath.

She has a box full of bright and loud props - donkey head puppets, gloves with finger-faces, you know the stuff.

The tunes are jolly, often familiar, and the kids obviously love it. But Heather's safety secret is not obvious.

'Music Bugs' is a franchise; for £7,500 Heather has brought a territory around Bath for five years.

She also gets the props, the music, the licences and paperwork and some training. In other words, she has shared her risk - for a fee.

"Franchises are great for people who don't want to dive in alone", says Katie Moore of the Start-up Community.

"There are now literally thousands of them, and they are increasingly popular at the moment."

Heather is fairly typical. A senior accountant at Dysons, the Wiltshire vacuum cleaner firm, she left to have her own baby.

When she recently started looking for a job again, the market for accountants had vanished, especially part-time.

"I wanted to be my own boss, but the great thing about Music Bugs is there's a community of other people like you.

"You can chat to them, learn from them - and you know they've made it pay."

Click here to see Heather's report.

Nicky Lucas, and business partner Rachel Grimstead, run a greengrocers

Our final baby to get a financial health-check from Brian and Katie is a good old fashioned greengrocers.

"It was always a bit, well, scuzzy", explains new owner Nicky Lucas.

"When the previous guy left we thought we could do it properly!"

Nicky Lucas and Rachel Grimstead have become greengrocers in Bath

It is hard work though.

Bristol's wholesale market opens at 5am, and Nicky shares the early bird run with her business partner, Rachel Grimstead, but their enthusiasm is obvious, and infectious.

"You obviously love it, and it looks great", says Brian Steel encouragingly.

"But - how much do you take every day, how much do you need to break even?"

"£211 a day - I know that one! " Nicky has the numbers at her fingertips.

Another smile from the business guru, and some sage advice.

"The usual problem with small food businesses is that you don't sell", Brian explains.

"People come in for some potatoes and a cabbage, sell them some apples, or strawberries, or a bunch of grapes too."

It is called 'upselling', and most new shopkeepers are too shy to try, he adds.

"OK, I get it", Nicky and Rachel reply, "we offer them a nice ripe squash or something tasty for the weekend maybe?"

"That's the idea - but stick to the veg", laughs Brian.

Click here to see Nicky's report.

Will these three survive?

Experts are fond of reminding new entrepreneurs that economic gravity affects everyone.

If people are spending less, don't expect to be immune. But our two advisors were pleasantly surprised by our three new babies.

"They're all doing something they're passionate about", says Brian Steel.

"That's vital, because they'll be working long hours. They'd better enjoy it."

As they leave, he has one question for Gill and her vintage store, 'Recession'.

"What do you call the shop when this recession ends - it will, you know?"