A new survey by Citibank finds that 23 percent of small businessowners have gone without pay for at least a year as they work tokeep their businesses afloat in a tough economy. Business owners are wearing more hats, working more hours andtaking less profit to keep their businesses going, said MariaVeltre, Citi's managing director of small business. They don tsit idle, they re asking, What do I need to do to make mybusiness grow? There is a level of sacrifice small businessowners take for their businesses. The nationwide survey of 750 small business owners found thatdespite financial challenges, one-third of respondents say theirbusiness is better than it was a year ago, up from 26 percent inJanuary. Another 33 percent expect their business will grow by morethan 10 percent in 2012. |
Keeping businesses afloat has required sacrifices on the part ofboth employer and employees, the survey found. Over the past fewyears, business owners report that they have, at one time oranother, taken less profit (78 percent), worked more hours thanusual (70 percent), and used their own money to help the businesssurvive (69 percent). But what is most revealing is that the majority of respondents 54 percent say they have gone without a paycheck in order tokeep the business running. And nearly one-quarter (23 percent) havegone without pay for one year or more.
Employees, too, sacrificed finances for their employers. More thanone-third of owners (38 percent) said their employees workedovertime without pay; 18 percent said employees either missedpaychecks or had paychecks delayed. Previous reports of tight credit for small business owners could be one reason that owners are going without paychecks. But a reluctance to borrow is another. As fears loom about what Obamacare and expired tax cuts could mean for their bottom lines, many are avoiding the idea oftaking on more debt.
Indeed, said Veltre, access to financing doesn t come up in thetop five most important issues among small businesses on oursurvey. We don t see that they are saying, We need cash. Instead, they are saying, We need sales, and we need consumerconfidence to be addressed. Veltre said she would characterize small business owners ascautious, even as they become more optimistic. They re holdingtight on hiring, because sales is still a question.
The survey, conducted between May 1-May 18, had an overall marginof error of plus or minus 3.58 percentage points.
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