Family and Friends Small Business Support Worth £64.3m
More than half of micro business owners rely on unpaid work from family and friends to keep business afloat
The majority (64%) of micro enterprises depend on family and friends for business support and advice, according to the latest Big Issues for Small Business report by Lloyds Bank Insurance.
The report revealed that support from family and friends, which averaged at six hours per week, amounted to approximately £64.3m a week – despite 41% of micro businesses paying family and friends an average hourly wage of £14 and 51% paying nothing.
In regards to the type of support provided, advice on business decisions came out top, with 40% of small firms admitting to asking family and friends for advice.
This was followed by getting family and friends to work on practical tasks (34%), run errands (29%), manage the business’ social media accounts (10%) and help with childcare (8%).
84% of micro businesses said that support from family and friends had a positive impact on their firm – with 24% having stated that it had been crucial to keeping their business afloat.
A further 35% of business owners said family and friends support had made running the company more manageable, 25% said it increased productivity and 13% said it had increased revenues.
However, nearly a quarter of micro businesses admitted to being unaware of some legal issues, such as what insurance was legally required for their firm – with only 18% of the businesses who had experienced obstacles (such as issues with technology and personal injury) saying they had the right cover in place to manage.
Damien McGarrigle, head of business insurance at Lloyds Bank Insurance, said:
“Starting up and running a business can be all-consuming, with family and friends often rallying around small business owners to ensure they are successful.
“However, micro business owners cannot solely rely on personal contacts to ensure everything runs smoothly.”