While the pace of the current economic recovery may be up for debate, one thing is certain: The last few years have been rough for many small-business owners. The credit crunch and the anemic growth that's followed the recession it caused mean most consumers have kept their wallets securely in their pockets and created some seriously lean years for small businesses. How did entrepreneurs and owners respond?
With sacrifice, according to a new edition of Citibank's small business survey that asked 750 American small business owners about their level of optimism, as well as exactly how tough the situation has been for them during the recent recession.
The poll found some uptick in owner optimism, though it's hardly time to break out the champagne to celebrate a robust recovery. Forty-three percent of small business owners told Citi business conditions were positive for this year's survey. In August 2010, just 24% of small business owners surveyed said the same. One-third of respondents said their own business is better than it was a year ago. That's up from 26% when the question was asked in January.
These modest increases in optimism can only be a good thing, but another section of the survey was more noteworthy. Citi also asked about how owners weathered these challenging years, finding that many small businesses were under serious threat. But the survey also uncovered a cheering level of personal sacrifice among owners.
Sixty-three percent of owners reported experiencing personal stress due to being accountable for everything, while 66% said the general state of the economy had caused stress. Such widespread stress is unsurprising considering the sacrifices the owners told Citi they had made:
- 78% took less profit to support the business at some point and 66% did so to pay employees rather than reduce staff
- 70% said they worked more hours than usual, sacrificing family time and missing vacations
- 69% used their own money to help their business survive
- 54% have gone without a paycheck; over the history of their businesses, 23% have gone without pay for one year or more
This admirable commitment to keeping staff working and the doors open is surely one of the reason small businesses are so admired in this country. (Gallup found 95% of Americans said they had positive feelings about small business in 2010. By contrast just 30% express satisfaction with the size and influence of major corporations.)
This willingness to sacrifice hasn't gone unnoticed by staff either. Eighty percent of small business owners told Citi they believe their employees appreciate the sacrifices they made to keep their businesses running. "The level of appreciation shown to small business owners by employees and customers is uplifting," said Maria Veltre, Managing Director, Citi Small Business.
Did you have to go without pay to get through the worst years of the recession?