The research shows that one in twenty business owners have actually remortgaged their own homes to free up money to pay wages and retain staff, rather than make redundancies.
Desperate to keep their businesses going, company owners are also 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 off 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 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, they’re re-locating to smaller premises and off-loading stock / inventory at greatly reduced prices too.
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 Than 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, as the chart shows 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.
Commenting on the research, Janet Connor, Managing Director, More Than, said: “Business owners care about the bottom line and rightly so. 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.