One in 10 small business owners have remortgaged their own homes to free up money to pay wages and retain staff, rather than make redundancies.
According to research from More Than, 35% of small business owners also admit to having taken significant pay cuts in the last five years to avoid laying of workers.
60% of those said this situation has lasted for more than a year and 17% say it could go on indefinitely.
Of those that have reduced their own wages, 70% have cut them by as much as a half, while one in 20 admit they aren’t ‘looking after number one’ in any way as they’ve scrapped their salaries completely.
As well doing away with marketing and advertising budgets (21%), they’re re-locating to smaller premises (12%) and off-loading stock / inventory at greatly reduced prices too (7%).
Across the country, the issue of holding onto staff when times are tight is most prevalent in the West Midlands (41%).
The same proportion of business owners in the West Midlands (41%) said the trading environment ‘wasn’t good’ (higher than anywhere else in the country), and 43% said new business leads had all but dried up.
According to figures from the latest edition of the Business Inflation Guide (BIG), produced by More Than Business, for the second consecutive quarter key costs for small businesses have risen only very marginally: a 0.31% increase in costs for Q4 2011 follows a similarly low increase of 0.05% in Q3.
Janet Connor, managing director, More Than, said: “Business owners care about the bottom line and rightly so. It’s sad that so many small business owners have had to remortgage their homes and take hefty pay cuts