A new study from Lloyds TSB Commercial suggests that British businesses are still reeling from the effects of recession and are as such ill-prepared to face a return to economic growth.

The research reveals that a third of firms (31%) have not taken any steps whatsoever to prepare their business for the upturn, while 36% don’t believe they need to do anything to ensure their business is ready to benefit as the recovery starts to gain momentum.

Amongst the 31% of firms that have not taken action to prepare for a recovery, 17% stated they hadn’t thought about it. However, 43% recognised that taking such steps would be essential if they were to survive in the long term. Almost half the firms questioned claimed they did not need any more help to prepare for the recovery. However, 51% of businesses surveyed recognised that well prepared businesses benefited during the last recession.

Almost two thirds (64%) believe their business will suffer from low cash resources, while 23% believe depleted capital will be an issue. A similar number (22 per cent) fear they will lack the capacity to meet demand for their products and services, while just over one in eight (13%) are concerned about potential management or strategy gaps.

Those businesses that have started to prepare for recovery are clear about the importance of taking action. Two thirds (66%) say they need to act now in order to benefit, while two 42% say they don’t want to lose out when the recovery arrives. A further 14% say they learned their lessons in the last recession.

The steps taken by those firms who have begun preparing is varied. 27% have sharpened up processes and working practices, and the same number have made efficiency improvements. One in ten (10%) have sought additional funding, while 6% have boosted research and development efforts. A further 5% are working to establish international networks, with a view to improving export prospects. The same numbers are looking more closely at the opportunities presented by the green economy.

John Maltby, managing director, Lloyds TSB Commercial said:

“Recession has weighed heavily on UK businesses and it is easy to see why talk of a recovery might bring welcome relief. But in the same way that we have encouraged firms to take action to survive the downturn, they will also need to prepare for the return to growth.

“The shape and scale of any recovery is still uncertain, but one thing is clear – those businesses already looking towards the upturn and planning how to make the most of it, are the ones which will thrive. And those firms that sleepwalk towards recovery risk not just losing out but falling into the overtrading trap.”

James Caan, entrepreneur and Dragon’s Den judge, said:

“Those businesses that have adapted, diversified and are prepared for the upturn are well placed to prosper and grow as the economy recovers. Businesses without a plan seldom go far and that’s especially true in times like these. It’s important that companies act now to plot how they’ll approach the opportunities that exist in the prevailing economic climate.”