Entrepreneurs Show Resilience in Adversity
New report about Entrepreneurs shows that:
- More SMEs are optimistic than pessimistic in spite of the difficult economic climate
- Euro uncertainty: 44% of SMEs in the EU countries surveyed had been influenced in their plans by the threat of instability in the eurozone
- SME finances are tight: only 12% found finance easy to find, but 73% reported no change in their relationship with their banks
- Independence over reward: 59% started their business to become their own boss, against 21% who wanted to make more money.
A wide-ranging report published today offers unique insights into the mood and behaviour of entrepreneurs in Europe and the United States as they grapple with economic crisis. They may be losing turnover, losing profit or even losing sleep – but they are not losing determination to succeed.
Published today by international business insurer Hiscox, the study entitled DNA of an entrepreneur (2.6Mb PDF) reports findings from research of 3,000 owners or partners of small and medium-sized businesses in six countries: the United Kingdom, the United States, the Netherlands, Germany, France and Spain.
Commenting on the findings, Bronek Masojada, CEO at Hiscox, said:
“SMEs are pumping life blood into the global economy. Those of us who work with SMEs, be it government, banks or other service providers, have a role to play in supporting them and their future goals.”
“The strength and resilience of entrepreneurs continue to shine through. Every day, SMEs have to assess and manage a wide variety of risks at different levels of intensity. Our study highlights their concerns over threats from the global economic environment, which are often very hard to control or even predict. However, it also showed that they are optimistic and believe they can succeed despite this backdrop.”
Key themes from the report:
More optimism than pessimism
Forty three percent reported negative or no growth in revenue last year. Despite this performance and the general economic climate, 47% of all respondents were optimistic about the year ahead for their business, against 26% who were not and 27% who were not sure. The Germans and Dutch were the most optimistic, the British and Spanish the least.
A worsening macro-environment – and low faith in institutions
More than four in ten (44%) SMEs in the five EU countries surveyed said their business plans were affected by the eurozone crisis although only 28% did any significant exporting. Against this background, the EU evoked more negative than positive responses. In each of the five EU countries, there were more SMEs who stated that the EU gave little or no help to their business than those who found it helpful. The Spanish had the lowest net negative rating (8%), the British the highest (40%). The Americans gave a net negative rating of 30% to the North American Free Trade Agreement. Only in France did more respondents find government helpful to business than not (central government helpful 41%, not helpful 31%; local government helpful 47%, not helpful 27%). With some significant national variations, 56% criticised their country’s “inflexible” labour laws and over two thirds were unhappy about taxation (67%) and bureaucracy (68%). And yet among all respondents the most frequently cited fear for the year ahead was losing the support of government (40%).
Finance is tough – but relationships with banks and lenders are stable
Only one in eight (12%) said finance was easy to find and half (50%) had experienced problems with late payments (75% of the Spanish). But only 38% had tried to renegotiate terms with lenders or had sought greater funding. Seventy three percent reported no change in their relationship with their banks and 10% had a better relationship.
Labour force issues – and frank views on new recruits
Although only 15% intended to recruit more staff next year (36% Germany, 10% USA), 54% thought they would avoid redundancies. Six in ten (60%) of those who had taken on school or university leavers were favourably impressed with their keenness and motivation, but fewer than half rated their basic arithmetic (48%), their time-keeping (47%) or their work ethic (46%). The Germans gave the highest ratings for arithmetic (60%), the Spanish the highest for reading and writing (61%) – the Dutch gave the lowest ratings on both counts (32% for arithmetic and 38% for reading and writing).
Motives, lifestyles and the working week (and the working lunch)
The main motive for going into business was to be one’s own boss, rather than to make money. Sixty two percent defined business success as affording a comfortable lifestyle. Average working hours were 42.5 hours per week (suggesting an increase of two hours since February 2010). The Germans worked longest (average 46.9 hours) and the British worked shortest (39.4 hours). The most frequent lunchtime choice was a working lunch or sandwich at the desk. The Germans were most likely to skip lunch altogether (20%) – the Dutch and the French were least likely (6% and 7%). Forty three percent said that the economic downturn had caused them greater stress. The Spanish (60%) were the most stressed, the Dutch (26%) were the least. Nearly three in ten (29%) reported sleep problems (led by the French). But 28% said that the crisis had made them more determined to succeed, and 29% said it had made them work more efficiently.