Since the beginning of 2012, the Government has sought to encourage entrepreneurs and business development, announcing measures including more red-tape cutting, making borrowing easier, providing support and tax incentives. Against this, the tide of recession seems not to have turned, with recent figures suggesting shrinkage of double-dip proportions rather than growth.
In January, an Aviva report on the small and medium sized business (SME) sector, indicated that a significant proportion of small and medium-sized business owners were losing their enthusiasm and entrepreneurial drive, with 25% thinking of returning to work and 50% saying it is too tough to be a business owner in the current climate.
Aviva reported that a reduction in the money taken out of their own businesses for personal use may be a contributing factor, with half of those (50%) surveyed having reduced the money they draw over the past two years. Restaurant owners appeared to have suffered 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%. Half of those surveyed had not asked for funds from the bank.
The survey recorded that SMEs had 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. 50% of independent retailers and shop keepers questioned, said that 2011 was tougher than expected - the highest of any business sector surveyed. In January, than one in three (35%) believed that there was an increasing risk of an economic "double dip" recession, compared with 28% when Aviva asked the same question in June 2011.
A quarter of businesses (26%) expected the first half of the year to be difficult as people curbed their spending, with 24% of those surveyed expecting a decline in sales. Less than one in ten (7%) expected good sales in the first six months of 2012.
So now that we have had the 2012 Spring Budget and a variety of legislative reforms and measures coming through, the Finance Bill etc, is the SME sector feeling any better? Is an entrepreneurial spirit returning with late spring and early summer? Where are the green shoots? Do things look better now and will small businesses be lifted and entrepreneurs heartened and re-energised by the Queen's Jubilee and the London Olympics? We can only wait and watch…