Robert Epstein is SMB Head at Microsoft UK

Britain’s economic recovery has been a long time coming. There was disappointment in the UK when the economy carried on sliding in the third quarter of 2009. The Office of National Statistics reported this week that the UK economy has officially come out of recession, albeit by a weaker than expected 0.1% growth in the last three months of 2009. Interestingly it highlighted that the UK economy had been the last major economy still in recession, when France and Germany came out of recession last summer, with Japan and the US also emerging last year. There may be several contributing factors to this disparity but the main issue for businesses to consider now is how to deal with the recovery stage now it is here?

It’s easy for companies to take a big sigh of relief and put the foot off the brake as they see capital moving around more easily again. The truth is that this stage can be just as demanding and risky as being in the midst of a downturn. Companies must ensure that their revenues are growing faster than their costs. This seems an obvious piece of advice but it’s amazing how many SMBs forget to keep track of their outgoings as soon as revenue opportunities resurface. Choosing which investments to go for at this stage of the recovery cycle is paramount to survival - it shouldn’t be forgotten that previous recessions are proof that more companies go under in recovery than during the downturn itself. You need to make strategic investments to allow the business to grow again and not fail under the pressure.

Some simple pieces of advice to help you compete as we enter this next stage include:

- Watch your cash flow - ensure you are pro-actively managing this and working with your bank , as well as making the most of the technology you already have in place – Business Intelligence and analytics tools can help here

- Don’t’ expand premises too early –look to see how you can continue to grow without pouring huge capital into this. Can you encourage hot desking and remote working through the use of web conferencing, Unified Communication technologies thus reducing overheads for example?

- Invest in IT that can help improve processes as your volume grows - Again Customer Relationship Management (CRM) and mobility capabilities that support remote/flexible working are a prime example

- Make use of online services – the digital world provides an amazing way to take on new IT capabilities or upgrade/expand your capacity without big upfront capital investment that will impact cashflow. Hosted solutions allow you to shift costs so you still have access to the latest and best IT capabilities but only pay for what you need and use. It also allows you to expand up (and down) quickly, easily and with no added cost. This way of purchasing and deploying technologies is expected to be an enormous opportunity for SMBs, who will for the first time be able to compete with the larger enterprises as we emerge from the recession

Despite this seemingly negative outlook the future is looking positive, as long as we react to the changing landscape with caution . My only advice would be not to forget all the cost cutting measures you have been forced to assess over the last 18 months - productivity still remains paramount. There is every chance of a relapse if we do not remain vigilant. Be careful, navigating your way through the upturn can be as hard as through the downturn!