By Orla Ni Sheaghdha

The most recent Spending Review handed down by the government means bad news for smaller businesses in Scotland. With cuts to public sector spending, many companies risk becoming insolvent. Scottish Enterprise offers advice for entreupeneurs trying to survive the recession, to combat this risk. Some smaller companies seem to be bucking the trend and are expanding rather than closing down. One such company is Xtreme Karting.

The go-karting company is owned by brothers Scott and Barrie Henderson and currently has a track open in Falkirk industrial estate. Plans for a new facility in Newbridge in Edinburgh are soon to be realised with the new track set to open for the New Year. Scott and Barrie established the business in 2004 and despite a slight change in customer base, seem to be faring well during the economic downturn. The choice of Edinburgh as the location for the new track demonstrates the business savvy of the two brothers. The city has always been a popular tourist destination and a hub for stag and hen parties. The addition of a go-karting track is likely to increase the attraction of Edinburgh as a weekend get-away.

“We’re very popular with regards nights out”, Scott Henderson says. “It’s very popular for stags and hens, especially with Edinburgh being so popular for stag and hen parties at the moment.” The brothers have learned to target their business at a new audience. When the company first started out the main customer base came from companies wishing to take out their employees or visitors for an evening at the tracks. This has shifted during the recession and interest is coming more from the individual than from the corporate client. The two businessmen seem to have managed to adapt to this change in the market through their use of promotions. As well as seeing business from holiday groups, Xtreme Karting is drawing in students through the offer of university discounts. This change in the marketing demonstrates their ability to adapt to the recession which allows for their expansion.

This positive outlook for the company, when placed in a wider context, is encouraging for other small businesses. The expansion of Xtreme Karting comes at a time when fears of a double-dip recession has casued other enterprises to fold. Cut-backs to the public sector have had a huge effect on private businesses. As much as 30% of financial support for these businesses come from sources that are being downsized by the government. It is estimated that 490,000 jobs are at risk for 2014-15 due to the stringent cuts. Companies such as Xtreme Karting need to rely on other resources to keep themselves above water or else face making redundancies and some severe cut-backs of their own. With £81 billion being cut from the public sector over the next four years, entrepeneurs are forced to turn elsewhere for support.

Scottish Enterprise is one of the bodies which endeavours to help out the small businessman survive the corporation-geared budget. Their website lists a number of grants and support funding available for various innovative schemes and business ideas. The body also offers advice for small companies and encourages networking between businesses within the same domain. The Scottish Tourism Forum and 100k Welcomes are two of the networking sites recommended for those working in the tourism sector. Chief executive of Scottish Enterprise, Lena Wilson states the importance of promoting communication between all enterprises, particularly during the recession.

“Now more than ever, we need to work together at supporting companies at both a local, national and international level. I’m determined that Scottish Enterprise plays a big part in this agenda.” The support offered by Scottish Enterprise and bodies of its kind make it possible for smaller businesses, such as Xtreme Karting, to grow during the economic downturn. This positive growth provides hope for those in despair after the latest government cuts. With financial support from other avenues, local entrepeneurs have a better chance of navigating their way through the recession and expanding despite the harsh cutbacks to the public sector. There is hope for the “little man” as proven by the Henderson brothers and their go-karting venture in Edinburgh.