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Entrepreneurial Spirit Under Pressure

UK Entrepreneurial Spirit Under Pressure

UK Entrepreneurial Spirit Under Pressure

Latest Aviva SME Pulse reveals one in four SME owners are considering returning to the workforce as an employee.

A third say they have lost the enthusiasm to run their own business.

Half say there has been a decline in the money drawn from their business for personal use over the past two years.

A significant proportion of small and medium-sized business owners are losing their entrepreneurial drive and thinking of returning to work with 50% saying it is too tough to be a business owner in the current climate, according to the latest bi-annual SME Pulse from Aviva1.

A quarter (26%) of SME owners admit they no longer enjoy running their business, with a third (32%) stating that they have lost the enthusiasm they had when they started their venture up. And as a result, the SME Pulse also reveals that one in four (25%) SME owners are considering returning to the workforce as an employee.

A reduction in the money they take out of their own businesses for personal use may be a contributing factor: half of those (50%) surveyed have reduced the money they draw, over the past 2 years, with restaurant owners suffering the biggest fall. Nearly three-quarters (73%) of those with businesses in the catering sector have seen a marked decline in the amount they withdraw from their business – with almost a third (29%) reporting a drop of between 20-25% and 10% reporting a drop of up to 50%.

SMEs facing challenging economic times
Aviva’s SME Pulse continues to track economic sentiment among business owners and the survey reveals that SMEs experienced a tough end to 2011. Nearly half (43%) said 2011 was tougher than expected, an increase since June 2011 when over one third (37%) expressed this opinion. This sentiment was particularly prevalent among independent retailers and shop keepers with half of those questioned (50%) saying 2011 was tougher than expected; the highest of any other business type surveyed.

Looking to 2012, there appears to be little improvement in sentiment. More than one in three (35%) believes there is an increasing risk of an economic “double dip” recession, a further increase compared with 28% when we asked the same question in the last Aviva SME research in June 20112.

A quarter of businesses (26%) expect the first half of the year to be difficult as people curb their spending, with 24% of those surveyed expecting a decline in sales. Less than one in ten (7%) expect good sales in the first six months this year.

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