Credit Crunch

"We are more creative than we used to be in the past and we have to be, because of the way things have changed over the years."

Chris Simpson, Business Link North East

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Then again, these are designer clothes going cheap. Second hand or not, they are bound to attract plenty of interest. Whether anyone will part with their money is still to be seen.

This small space is called 'The Little Black Dress Agency'. It is Yarm High Street's newest outlet, but it's launching in the middle of the worst recession in living memory.

Proprietor Katie Moulding doesn't seem worried. In fact, given the nature of her business, the recession was among her reasons to go ahead.

"I worked in a shop similar to this where I used to live and it was such a success over there and it was so successful with the economic situation at the moment, so that's what really pushed me into doing it."

She admits, though, that it wasn't the only reason.

"I'd actually looked for jobs elsewhere and I'd struggled to find a job with a company, or something like that, so I decided to set up my own business and if I didn't do it now, I would never do it."

Potential

Katie is not alone. In fact, new business start-ups habitually increase when economic times are tough. Business and Enterprise North East says it has helped 4,000 people start their own business in the North East in the past twelve months; nearly 80 a week.

Statistics suggest most of them will fail, but recent history shows that many of the companies that have defined Britain's economy have been launched during difficult times.

Business Link North East account manager Chris Simpson hopes the current crop of new start-ups will be the beginning of big things for the region. "The government's launched a new brand called 'Solutions for Business', which really tries to simplify the process for people accessing business support across the UK and Business Link in the North East are very keen to become a leader in that.

"What we're looking to do as far as the North East is concerned - yes we're in an economic downturn at the moment - to really try and encourage businesses to both start up, and also businesses to move into the North East, so the North East is going to be the place to open a business and also to move your business to."

Katie prepares her shop for customers.

Banks

The Federation of Small Businesses has been pushing the government hard on the issue of cash-flow. Small businesses have small cash reserves and it is all too common for them to go out of business with enough orders on the books to meet their payments.

If the money does not arrive in time and the bank will not lend, a perfectly healthy business can find itself going under and Chris Simpson admits that 2009 is not a good year for new businesses to get a sympathetic ear from their bank managers.

"It's very difficult, as we all know, to get finance at the moment and I think it's important that they do get support, to ensure that they are going to the bank with a correct proposition."

Back at The Little Black Dress Agency, however, Katie is, so far, full of praise for her bank. "I took out a business loan with them. They've been really helpful. I've used the telephone banking, the internet banking with them. they've been really great."

The same can not be said for the credit card company. The chip and pin machine still has not arrived and Katie and her mother are getting sick of calling and failing to get through.

Katie is not new to the world of the small business. "Mum and Dad have owned businesses since I was about two, so I've worked with Mum and Dad in all of the businesses that they've had and also I've worked as assistant manager in a shop such as this."

For all her confidence, Katie admits, though, that her venture is a risk. "Yes, but hopefully we will succeed, because most women I know have something in their wardrobe that they simply don't wear anymore, that they don't like, they don't fit into, that's just sitting in their wardrobe that they can bring here, I can sell it on their behalf and they'll get some money back."