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November 29, 2011 - NEW YORK – A wide-ranging report published today offers unique insights into the mood and behavior of entrepreneurs in the United States and Europe as they grapple with economic crisis. They may be losing revenues, losing profit or even losing sleep – but they are not losing determination to succeed.
Published today by Hiscox, the international specialist small business insurer, the DNA of an Entrepreneur reports findings from research of 3,000 owners or partners of small and medium-sized businesses in six countries: the United States, United Kingdom, the Netherlands, Germany, France and Spain.
Commenting on the findings, Bronek Masojada, CEO at Hiscox, said: “Small business owners are pumping life blood into the global economy. Those of us who work with SMBs, 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, SMBs 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%) SMBs in the five EU countries surveyed said their business plans were affected by the eurozone crisis although only 28% did any significant exporting. In the US, 15% reported cancelled or abandoned business plans due to the financial instability in the EU. The Americans also 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” labor 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, with the US respondents most likely to be denied by banks (33%), 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.
Labor force issues – and frank views on new recruits
Although only 15% intended to recruit more staff next year (36% Germany, 8% USA), 54% thought they would avoid layoffs. Six in ten (60%) of those who had taken on college or university graduates were favorably impressed with their keenness and motivation, but fewer than half rated their basic arithmetic (48%), their time-keeping (47%) or their work ethic (46%) as either Excellent or Good.
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) and the US fell in the middle (41 hours). The most frequent lunchtime choice was a working lunch or sandwich at the desk – US (45%). Forty three percent said that the economic downturn had caused them greater stress. The Spanish (60%) were the most stressed, followed by the US (50%) and 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.
Hiscox specializes in small business insurance coverage such as professional liability insurance (errors and omissions insurance) customized for a range of knowledge-based professions including IT, management consulting, business consulting and marketing. Hiscox offers professional liability insurance quotes direct and online in real-time along with other liability insurance products such as general liability insurance and business owners insurance.
Read more news from Hiscox Small Business Insurance.
For further information please contact:
Hunter Hoffmann (646) 442-8341 email@example.com
Notes to Editors:
DNA of an Entrepreneur - Sample and Methodology
Respondents were 3,000 owners or partners in businesses with fewer than 50 employees, 500 each in UK, USA, Netherlands, Germany, France and Spain. The businesses were predominantly service-based (84%). 87% were below £1 million annual turnover, 57% below £100,000. 39% were one-person businesses and 30% had fewer than five employees. 58% or respondents were men, 42% women. 52% of respondents were aged 40-59, 35% under 40.
The research was conducted for Hiscox by The Survey Shop. The sample was drawn from online panels. 3,000 owners/partners took part between 5th-11th September (five countries) and 3rd-9th October 2011 (Spain). Statistical accuracy: +/- 1% to +/- 1.5% for the whole sample of 3,000 and +/-2% to +/-4% for each country’s sample of 500.
Access the full DNA of an Entrepreneur report.
About Hiscox Small Business Insurance
Hiscox, the international specialist insurer, is headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). Hiscox is the first company in the U.S. to offer insurance for professional services businesses with 10 employees or less direct, online, and in real-time. We provide professional liability, general liability and business owner’s insurance, underwritten by Chicago-based Hiscox Insurance Company Inc., which is rated ‘A’ (Excellent) by A.M. Best Company. For more information, visit the Why Choose Hiscox? page. Hiscox also provides professional liability, property and specialty insurance to US businesses through US-based brokers. This communication does not constitute a solicitation of business by Hiscox’s syndicates at Lloyd’s, London.
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