Small businesses are less optimistic about the future than last year, according to a survey by global insurer Hiscox.
The survey of 3,000 small business owners in the UK, US, Netherlands, Germany, France and Spain found 38% of respondents said they were optimistic about the year ahead, compared with 48% the previous year. The number who said they were ‘not optimistic’ rose from 27% to 33%. The greatest decline in optimism was in the Netherlands, with a fall of 19 percentage points between this year and last (61% in 2012 versus 42% this year).
Although just over a third (37%) said that revenues had increased in the past year, that figure has fallen from 46% in 2012. At the same time, just under half (47%) reported customer growth compared with 60% in 2012, and just over half (51%) said their customers were taking longer to pay.
The survey also found that while the average small business boss works 41.1 hours a week, the British work the shortest week at 37.6 hours – six hours less than their German counterparts.
In terms of finance and staffing, over three quarters of respondents (78%) said they had found securing finance for a new business difficult, with only the British saying that securing finance is easier this year. Only one in 10 intended to increase headcount in the year ahead, compared with 15% a year ago. However, 63% of all respondents expected to avoid redundancies – a slight increase on last year.
The research found that nearly one in three respondents (29%) had developed a new product or service in the past 12 months. The American response was the lowest at 19% and the Spanish the highest at 39%. More than half (51%) of the innovators said their sales expectations had been fulfilled and nearly two thirds (64%) planned further innovation in the coming 12 months.
More than half of respondents or their colleagues (55%) had engaged in some form of training or professional development in the past year. The proportion was lowest in France (40%) and highest in the Netherlands (67%) and Spain (66%). The average time spent on training and development was just over six days, and the Spanish were the most committed in this area, investing an average 9.9 days. Most popular was trade, technical or professional skills development.
Despite the challenges they faced, more than half of those surveyed continued to prefer running their own business to being an employee. The most commonly cited benefits were greater flexibility in working hours, the ability to influence the direction of the business, more control and pride in one’s work.
Some 38% of entrepreneurs said that a lack of government support is their biggest fear for the year ahead. The British were the least critical of government bureaucracy and labour laws.
The research also asked what activities business owners felt constituted ‘work’ and highlighted major variations between countries.
Some 45% of all respondents counted travelling to and from work as work, and 37% considered they were working if they ate lunch at their desk. The British had the most elastic definition of work in three categories: lunching, networking and attending to emails out of hours.
Another survey out today from online accounting firm Free Agent and YouGov shows nearly two thirds of small business owners check emails and keep on top of their business while on holiday.
Bronek Masojada, CEO at Hiscox, explained: “Our research findings support the idea that small businesses are adapting to ‘the new normal’, anticipating tough trading conditions rather than expecting any early return to the boom years of the last decade. They are responding to the changing business environment with determination and inventiveness – launching new products or services that put them ahead of the competition, and investing in training and up-skilling. They also have a clear agenda for government, something policy-makers would be wise to study as they work towards securing a sensible and sustained economic recovery in each of these countries.”