The future's bright - for entrepreneurs

Recession worries keeping you up at night? Why not try on an entrepreneur's rose-tinted glasses?

Last Updated: 31 Aug 2010

The papers might be full of gloomy predictions about our impending economic doom, but it seems that nothing can douse the natural optimism of entrepreneurs. According to a new survey by Deloitte, 45% are expecting revenue growth of more than 20% in the coming year, with further growth of more than 50% over the next three years. Technology, media and telecom bods were particularly bullish, with 26% expecting 111% growth by 2011.

The survey, which Deloitte carried out in partnership with London Business School, picked the brains of a wide range of entrepreneurs, from wet-behind-the-ears whizz-kids to seasoned campaigners. But across the board, respondents saw plenty of room for growth: particularly by developing new products and services; and also by entering new markets (primarily in North America and Western Europe). And a hardcore 17% even said that the economic slowdown will have no impact whatsoever on their business. That’s the spirit...

This optimism also applies to valuations: most thought their business was under-valued, and many are expecting high multiples when they sell up. Although interestingly, three-quarters of those surveyed didn’t appear to have any kind of exit strategy – 39% have no plans to exit and 35% are banking on an opportunistic third party bid. Since many people start a business with the objective of making themselves a hefty pile of cash, this might seem a bit odd – we wondered if it they just see this as a bad time to sell, but only 3% said they were waiting for a particular point in the economic cycle. And as Deloitte points out, if you’re planning to exit at some stage, you need to start thinking about it a long time in advance.

So is this just blind faith, or justified self-confidence? Entrepreneurs are often optimists by nature, but it’s also true that their businesses will often be faster, leaner and more flexible than their larger rivals – always handy in a downturn. On the other hand they might not find life as easy as they expect; most consider themselves to be an employer of choice, but then ‘a shortage of quality people’ was seen as the biggest barrier to growth. Something doesn’t quite add up there…

Still, if anyone thinks their growth dreams are crazily optimistic, consider this: according to a study from Merrill Lynch and Capgemini, last year the world’s richest people increased their wealth by more than 9% to $40,700bn – despite the credit crunch. What’s more, the study predicts that the 10m people with assets of more than $1m will expand their wealth by 7.7 % every year, to give them a total pot of $59,100bn by 2012. And if there’s money to be made, these entrepreneurs will fancy their chances of making it....

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