Entrepreneurs still bullish in the face of adversity

SME owners remain optimistic, despite the downturn - although newsagents might beg to differ.

Last Updated: 06 Nov 2012

It’s official: entrepreneurial Brits are made of sturdy stuff. A new study commissioned by business insurer Hiscox has found that UK SME owners remain surprisingly defiant as they ride out ‘the worst recession in living memory’. Yet despite this seemingly rosy outlook, small firms aren’t hopeful that there'll be a recovery any time soon: fewer than one in ten believe that the economy will improve by the end of this year. So much for those green shoots...

The good news is that over half of SME bosses are confident that their businesses will survive the downturn. What’s more, almost half (48%) have taken no additional measures to ride it out, and of those who have, these actions haven’t been too drastic – only 9% say they've been forced to make redundancies, while nine out of ten claim they haven’t enforced salary cuts. A similar number have even continued with bonus payments. Entertainment budgets have also gone untouched, with 85% continuing to wine and dine clients (let's face it, they need them to keep buying).

However, not all small business owners are tucking into the expense account, in the name of client entertainment. For instance, independent newsagents are taking a serious battering at the moment, with one closing down every day in the UK. The theory is that these stores are buckling under competitive pressure as they are drastically undercut by one-stop-shop supermarket giants like Tesco and Asda. The National Federation of Retail Newsagents wants the government to intervene before our street-corner staples become a thing of the past.

The economy looks unlikely to do newsagents any favours either. Despite being hopeful about their survival in the recession, leaders of small businesses told researchers that they don’t think the UK is off the critical list just yet. In fact, almost half don’t expect a recovery before September 2010, while the glass-half-empty types (23%) believe Britain will continue to be mired in recession until 2011 or beyond. If this does turn out to be the case, they're going to have to rely on that optimism a little bit longer...

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