Change seems to be the defining feature of the global economy right now. Britain's recession has become official and news of struggling firms across the globe is continuing to appear. These are difficult times for SMEs and anyone considering starting a new business, but a positive approach is the only way forward.

To embrace change you must understand it. Make it your business to know what is happening in your sector and your markets. What new trends are appearing and how can you capitalise on them? What is driving consumer decisions? Full scale market research may be unfeasibly expensive but talking to your customers costs nothing. In the same vein speak to associates to share information and strategies. And listen to your staff - effective decisions can only be made if you know exactly what the different elements of your business are experiencing.

Succeeding in a turbulent climate also means having the confidence to make bold decisions. It helps to realise that business is always a risk and calculated risks lie behind all of business' greatest achievements.

Collaborate
As every networking junkie knows small firms are stronger together. Now is the time to build on existing alliances and start new ones with like-minded organisations. The ‘like-minded' bit is crucial - strength comes from joining forces with people with the same ethos so that you can easily share contacts, knowledge and even resources.

Succeeding in a turbulent climate also means having the confidence to make bold decisions
The most valuable partners are often those who target the same market in a similar but non-competing field. Think marketing firms and web designers, restaurants and grocers, accountants and solicitors.

Mutually beneficial partnerships work differently depending on your sector but often deliver some form of joint referrals. These can be boosted with an attractive referral scheme giving partners cause for sending business your way and vice versa. If you've already got one how many of your partners are delivering good referrals at the moment? Could you do more to motivate your partners, or do you need to find better partners that will pull their weight?

Working with competitors can also succeed in the right circumstances. For a big pitch there can be strength in numbers and this is especially true when SMEs are competing with blue chips.

Partnerships can also extend beyond traditional business borders. Could you benefit from working closer with the public sector, NGOs, charities or social enterprises? Different sectors are feeling the impact of economic changes in different ways so you may be able to assist each other in your areas of weakness. For example in the West Midlands an innovative ICT cluster has been created featuring three quarters of the region's universities and is fostering links between academia and small firms. This collaboration has helped to drive forward SMEs in the region, in turn boosting the region's profile and its attractiveness for business investment.

Innovate to capture new market opportunities
If you look at the growth and prosperity that followed the Industrial Revolution it is clear that emerging economies such as China and India will eclipse the established economies in the west within a matter of a few years unless SMEs in this country continue to innovate.

As in the 19th century new technology and improved working methods saw British enterprise conquer, so businesses must continue to innovate to maintain a prosperous and dynamic economy. But how can this be achieved during a recession?

Successful innovation is about listening to customers, spotting new trends and delivering value. Innovations that tap into real market desires and deliver value will continue to be profitable even in harsh market conditions.

Finance South East offers SMEs in the South East of England access to funds and private investment networks. For more information visit www.financesoutheast.com