By Daniel Hunter
It would seem Britain has a new crop of ‘heroes on the high street’ - and trading estates and retail parks too for that matter - as research shows how small business owners are going to extraordinary lengths to protect their workforces during these tough economic times.
In a surprising display of benevolence, one in twenty have actually remortgaged their own homes to free up money to pay wages and retain staff, rather than make redundancies, according to research from MORE TH>N Business.
Desperate to keep their businesses going, company owners are taking huge hits for employees — and mostly straight to their own wallets. In addition to the above, 35 per cent admit to having taken significant pay cuts in the last five years to avoid laying of workers.
Far from just a short-term measure, of those who have reduced their earnings to avoid making redundancies, 60 per cent say it’s something that’s lasted for more than a year and nearly one in five (17 per cent) say it could go on indefinitely.
What’s more, when it comes to the actual amounts bosses are foregoing, they’re far from token gestures. Of those that have reduced their own wages, 70 per cent have cut them by as much as a half, while one in 20 admit they aren’t ‘looking after number one’ in any way as they’ve scrapped their salaries completely.
But the sacrifices don’t stop there. As well doing away with marketing and advertising budgets (21 per cent), they’re re-locating to smaller premises (12 per cent) and off-loading stock / inventory at greatly reduced prices too (7 per cent).
Across the country, the issue of holding onto staff when times are tight is most prevalent in the West Midlands (41 per cent) — a strange fact given that the area has been identified as the worst place for small business trading in the UK at present.
The same proportion of business owners in the West Midlands (41 per cent) said the trading environment ‘wasn’t good’ (higher than anywhere else in the country), and 43 per cent said new business leads had all but dried up — another UK wide record the area will be less than proud of.
Irrespective of cuts to corporation tax announced in Chancellor George Osborne’s latest budget, small business owners will no doubt feel major changes are required to kick start the economy — and the data from MORE TH>N Business shows they’re more than willing to do their part as 28 per cent admit to having seriously considered relocating to draw in more new business leads. In the West Midlands, the figure rises to 30 per cent.
While the research will make for glum reading for those that run small and medium sized enterprises, there could be a light at the end of tunnel — according to figures from the latest edition of the Business Inflation Guide (BIG).
A unique measure of small business inflation, the BIG index charts fluctuations in price for 20 of the most important expenditure costs for small businesses. It shows how for the second consecutive quarter key costs for small businesses have risen only very marginally: a 0.31 per cent increase in costs for Q4 2011 follows a similarly low increase of 0.05 per cent in Q3.
“Business owners care about the bottom line and rightly so," Janet Connor, Managing Director, MORE TH>N, said.
"It’s sad that so many small business owners have had to remortgage their homes and take hefty pay cuts, but at the same time it shows real compassion on their part that they’re prepared to sacrifice personal gains for the sake of their staff.
“This research shows that the trading environment for small businesses remains tough but the latest set of results from the BIG suggest they might be able to look forward to the summer with greater optimism — the relatively low 0.31 per cent increase in costs for Q4 2011 follows an even smaller 0.05 per cent increase in Q3. Things won’t change overnight but this is good news.”
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