When the respected Fraser of Allander institute at Strathclyde University joined the ranks of experts that believe a recession would be unavoidable in Scotland next year, all that seemed to be in doubt was the probable length and depth of the slowdown.

Any firms that may have been hoping that someone may yet spirit up a way to rekindle the key property market quickly and get bankers to rediscover their enthusiasm for lending will have to think again.

However, one striking feature of the latest forecast by Fraser of Allander is that the institute's boffins have no doubt that a recovery will happen eventually. They dismiss suggestions that Scotland's growth rate may be cut permanently out of hand.

With that in mind, SMEs will have to focus on getting through the next 12 months but also think about how they could cash in on any upturn. In this week's SME Focus, we highlight the experience of a marketing enthusiast who had to reinvent his business, a process in which he found that officialdom could be surprisingly helpful.

Name:
Andrew Grant.

What is your business called?
Nation1.

Where is your business based?
Glasgow.

What services does it offer?
We are a digital agency with global reach. What that means is that Nation1 drives traffic to websites and sales through the internet. If you think of what a traditional advertising agency does, and instead of TV use YouTube, replace PR with blogging, direct mail with e-mail, billboards with banner adverts and through into social networks etcetera, then you get an idea of what we do.

What is its turnover?
For 07/08, it was £780,000. It would be great to hit £1m this year.

When was it formed?
We started out life in 2000 handing out fliers for nightclubs, when I had just left Strathclyde University. We branched out into producing a free magazine called the Clubbers' Guide to Glasgow, then launched Edinburgh and Ibiza versions.

It was not long before we were handing out stuff for drinks companies, who then asked us to get involved with sampling new products. That, in turn, opened up the youth market, which got us to the table pitching for youth brands. This helped us win some big name brands, like Pepsi, Brylcreem, United Colors of Benetton, Xscape and the indoor Snowzone. Digital was the next logical evolutionary step.

How did you raise the start-up funding?
I wrote a business plan with the help of Business Gateway and managed to get £5000 from RBS. We have also received a £50,000 loan from the West of Scotland Loan Fund and we have a small overdraft. Apart from that, our growth has been totally organic.

What did you do before you took the plunge?
Studied marketing at Strathclyde University and promoted events at Glasgow nightclubs.

Why did you take plunge?
Why not? At that stage, I had everything to gain and nothing to lose.

What was your biggest break?
Winning the Brylcreem account against two big London agencies.

What was your worst moment?
Fresh Tan UK going bust on us in year four, leaving us with over £80,000 worth of unpaid invoices and having to explain that to suppliers, clients, non-executive directors and staff. Worst of all was the reaction of one non-exec, my head designer and our largest client, who all walked at the time I needed them most.

I learned a lot about people and how important it is to spend time getting the right people beside you for the right reasons.

This was the worst moment and my best, as it forced me to take a long, hard look at the business I had created and ask myself, "What are we? Who are our customers? Why are we doing this?"

I felt a great degree of failure, but at the same time I refused to let someone stop me from achieving my goal, to build something great.

I took a long, hard look at the advertising scene in Scotland and started to ask questions: "Who is good at what? What does the future hold? What do clients really want? Where is the gap in the market? Where is the big time opportunity?"

I came to the conclusion that digital was the future.

What do you enjoy about business?
The ever-changing challenge. Nothing in business is easy, which makes it all the more satisfying when you achieve your objective.

Transforming the agency into what we believe is a market leader in digital communication was a great challenge. I learned a lot about how to manage people and change - mainly through getting it wrong to start with. It was tough to start with as we let people down.

What we were doing was so new that we made mistakes. Initially we used Indian developers. They let us down and we had no control over speed or quality.

What won us brownie points is that when we did get it wrong, we bent over backwards to put it right at no extra cost. Existing staff got nervous that they were going to lose their jobs under the new digital vision and some did. Keeping up staff morale was tough. Attracting great people was tough, but we did it. Never gave up.

What do you least enjoy?
Account management. I don't have very much patience. I get a buzz from the sale. Delivering what we sold is not my forte. I have a really great team to do that for me.

What is your biggest bugbear?
When you spend lots of time and money pitching for an account and the prospect doesn't even give you the respect to tell you one way or another how you did. Eventually, you assume you didn't get it. But after all that hard work on their behalf, it would be the least they could do.

What are your ambitions for the future?
For Nation1 to be the first choice for high-growth clients looking for a digital agency with global reach. Operationally that means attracting and retaining the best people; moving to a new Glasgow HQ; opening in Mumbai; opening in London; opening in Shanghai and floating on the Alternative Investment Market.

What single thing would most help?
Fast-paying clients.

What was the most valuable lesson you have learned?
Define a clear culture for your company and ensure that all your staff understand that culture and your vision. Nation1 is the best brand we will work on and if we can't do it for ourselves, how can we ever expect to do it for other people?

What could the Westminster or Scottish government do that would most help?
I don't really know enough about that subject to comment constructively.

What I can say is when times were tough, Her Majesty's Revenue & Customs were amazing. They gave me time to pay and the guy we dealt with was very helpful and understanding.

We have also recently become an account managed company with Scottish Enterprise and their involvement has already delivered genuine and tangible returns for the business.

How do you relax?
I enjoy a healthy social life. I have a great group of mates from university and still keep in regular touch.

I figure work like a demon, then head off somewhere to let your hair down. Also with my Blackberry I am never far away.