By Claire West

Arctic weather conditions, the fiscal squeeze and the consumer trend towards online shopping are piling the pressure on small businesses this Christmas. According to Office of National Statistics, one in eight small businesses closed in 2009 and this year has been even harder on business owners. The internet was seen by many as the great leveller, but small businesses struggle to compete with online high street brands that can afford to invest in good web design, ecommerce tools and SEO to boost their online presence.

Rajen Ruparell, Director at Groupon, the UK’s leading group buying website, said, “I spend a lot of time speaking with local business owners and understanding the challenges that they face on a daily basis. What is clear is that everyone has felt the pinch in 2010 but for many the Christmas period will be critical. Consumers often favour the convenience of online shopping and high street stores at Christmas time and with less cash in their pockets, local businesses are missing out”.

“Groupon partners with the best local businesses to advertise their goods and services at discounted rates to an online audience of local subscribers with no need for a huge upfront investment in their website or online presence. By selling a set number of deals, the business more than compensates for offering its product at a discounted rate and gets access to an engaged new customer base, while the consumer gets a great deal and a new experience - everyone is a winner! 89% of our partners are interested in being featured again which shows that this model really works for small businesses”.

Groupon works with 2,700 small businesses across 36 towns and cities in the UK to offer subscribers incredible discounts on local deals such as spa treatments, restaurants, hotels and minibreaks and services like deep home cleaning and photo shoots. By the end of 2010, savvy UK shoppers will have saved over £101million through Groupon deals, with over a quarter of savings being notched up in December.

Manos Schizas, Small Business Policy adviser from ACCA, the Association of Chartered Certified Accountants, agreed with Rajen. “Accountants have first hand knowledge of the accounts of small businesses and they're telling us that this year has been tough. Even growing profitable businesses can fail if they run out of cash, and the combination of erratic demand and a tighter supply of finance has made a lot of businesses very vulnerable. Normally, many small businesses and their owners are counting on the money they make in the run up to Christmas to see them through January and February. But with the recent adverse weather conditions, sales predictions have really been thrown out”.

Ruparell concluded, “If you are still looking for a stocking filler, instead of giving socks or chocolate this Christmas, I urge shoppers to think local and consider treating their relatives to a special something with a groupon — whether it’s a January spa day for Mum or a trip to the zoo for the grandkids at half term. Keep your eye on the site for last minute gift ideas before Christmas arrives”.

Client testimonials

“The first deal Treat and Revive did with Groupon bought us in well over 600 new customers, and that was just the start of it; the start of a very fruitful business relationship with the world’s leading media and advertising platform! The whole process, from start to finish was really smooth and easy thanks to Groupon’s business consultant, Paul Demetriades. To date, we’ve been featured four times and with huge success. Each time it’s bought me in hundreds of new customers, all of which are exactly the type of clientele I’d like to be targeting. The amount of profit generated allowed me to buy a brand new Audi TT! Thanks for a great few months Groupon, and I look forward to many more success stories with you!” - Sheena Kajal, Treat and Revive, London

“I'd tried this type of advertising on my own in the past, because for a therapist it’s a fantastic way to build up a client base. I found it very hard to even give my treatments away when I contacted various companies. Then Groupon rang me, I jumped at the chance. I was amazed I sold 172 treatments, where else would I get that kind of volume of customers in one day? If I'd have paid the local newspaper for a big page spread I'm sure I would not generate that amount of customers. It’s amazing that I've generated 172 clients, and made money not spent money! My website hits have increased dramatically. I've made people aware of other treatments I offer, and have booked a few in. It’s so much easier to up-sell other treatments when the client has met you and just enjoyed a treatment. I've sold more products and generally been busy, which is fantastic. I'm not sure if Groupon were the reason for this but, I've also been contacted by Radio Nottingham to be on the afternoon show talking about my business and all things holistic- another indication that my reputation as a therapist is growing. I feel it’s made a massive difference to Retreat Therapy in helping me build a healthy client base.” - Jane staples, Manager, Retreat Therapy, Nottingham