Business owners 'raid savings accounts'
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A fifth of small business owners raided their savings accounts last year to keep their company going as the financial crisis wore on.
Billions of pounds have been drained out of entrepreneurs’ personal savings accounts in an effort to keep their organisation afloat.
While the financial downturn continued to make its presence felt in 2009, Hiscox reveals that one in five owners of small and medium-sized enterprises (SMEs) chose to sustain their organisation with their own money.
And with an average of £17,030 being withdrawn, the insurance provider notes that a total of £16 billion was raided over the course of 2009.
As part of efforts to boost business accounts, a tenth of entrepreneurs questioned reduced the wages of their senior staff, although 34 per cent opted to cut their own pay.
One out of three put in extra hours, with 36 per cent of those questioned concentrating on securing relationships with existing clients.
While such efforts may have sustained their organisation, it may have come at a cost. Some 13 per cent of respondents state that their marriage has suffered, while 24 per cent have struggled to sleep due to concerns about their business.
But with the country starting to show signs of economic recovery, one in four business owners claim they will look to expand their organisation over the course of this year.
Commenting on the figures, Alan Thomas, small business expert at Hiscox, states: “SME bosses have been the unsung heroes of the recession. They have made enormous sacrifices and taken significant personal and financial risks to pull their businesses through the last two years. Their positive outlook for the year ahead is testament to the resilience of UK entrepreneurs and with 25 per cent planning to expand in 2010, they are doing their bit to help lead the UK’s recovery.”
And there may be a further boost for the UK accounts of entrepreneurs as British Chambers of Commerce director general David Frost claimed that businesses were placed “at the heart” of last week’s Budget.
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