“Sorry, no paycheck this week.” It’s a phrase completely foreign to most government workers and politicians, but all too familiar in the small business community.
More than one of every two small business owners has skipped a payday to keep their business afloat through the tough economy, according to a national Citibank phone survey of 750 small business owners/operators conducted last month.
Fifty-four percent of owners said they have gone without a paycheck at some point, and almost one-quarter have gone without pay for one year or more sometime in the history of their business. Many more have taken paycuts or given up vacation and family time to keep the company going: 78 percent said they have taken less profit to support the business and 70 percent worked more hours than usual.
Small business employees know the drill too. More than one-third of owners said their employees worked additional hours without pay, and 18 percent said their employees voluntarily missed or delayed a paycheck for the good of the company. No mention of how many did so involuntarily.
Even while many owners are sacrificing their own paychecks, they are still investing in growing their companies, the survey revealed. Thirty eight percent of respondents increased the amount they spent on capital investments such as computers, inventory, and facilities over the past 12 months.
The source of that funding? Their own wallets in most cases. Sixty nine percent of owners funded improvements personally, and most of those withdrew the money from their own savings accounts. Three-fourths of companies also reinvested revenues or profits into the business.
Not surprisingly, the biggest challenge to owning or running a business cited by 66 percent of owners is the general state of the economy. Coming in a close second is “personal stress and being accountable for everyone and everything.”
It’s little wonder small business owners feel no one in Washington really gets them.
- YEC Member Spotlight: Arvand Sabetian, Founder/CEO, Arvixe Young Entrepreneur Council