The figures reveal that 26% do not have a contingency plan in order to safeguard their businesses against the credit crunch. Over a quarter (27%) of the business leaders surveyed admit they only began to plan for the future during the past six months, while 18% have just started to do so. This lack of planning could cost small firms dearly. The Hay Group said business leaders in the UK are forecasting a 1.3% fall in profits over the current financial year (2008/2009), that is a drop of £900 million across the British economy.

The FPB is warning firms that failing to prepare is preparing to fail. It is vital that companies seek support if they do not have a strategy in place or have not made any amendments to their current plans. According to Hay Group, 68% of businesses are not changing their plans to compensate for the credit crunch, and only a sparse 13% are making plans for when the economy starts to recover.

"Although the research does give cause for alarm, it must be remembered that small businesses are generally very flexible and are usually better placed than their larger competitors to cut costs, and can often react to the demands of the market more quickly," said Philip Moody, the FPB's Senior Member Services Representative, adding: "Due to this economic downturn, many businesses are contacting us to find out if they can make savings through our various discounted services, which are proving very popular."

Small businesses can protect themselves by planning ahead using the FPB's range of user-friendly guides, including the complete business checklist, Costs, Controls and Profit. In addition, they can benefit from the FPB's Employment Guide and Health & Safety Guide.

Small businesses can also take advantage of the FPB's range of money-saving products and services. FPB members save thousands per year when insuring their businesses, raising asset and invoice finance, as well as arranging business telecoms, business monitoring and legal expenses insurance.

Other savings include utilities, card processing, purchasing, payroll service, pay-as-you-go business software rental, business rates appeal and mobile card terminals. The FPB is also supporting small firms' efforts to comply with their environmental responsibilities through Green Buying.

One major problem for small firms is late payment, and the problems it causes to cash flow. FPB research in 2007 found that 74.7% of members believe late payment severely affects cash flow and poses a ‘considerable threat' to the viability of their business. Also in 2007, research by BACS payment services found that late payment had cost the UK economy £18.6 billion over the previous year. On average, small firms were owed £30,000 at any one time. It is essential that businesses have strategies in place to guard against the economic downturn.

Barriers to growth and, in some cases, the survival of a business, are being highlighted by the FPB's ‘Think Smallest First' campaign. The FPB is encouraging decision-makers and politicians to prioritise the needs of the smallest firms.

The FPB is urging all members and non-members to contact the FPB, to see what they can save. Contact the FPB on, 0845 130 1722, or via www.fpb.org.