23% of Small Business Owners Went a Year Without Pay

story from Breitbart
by William Bigelow

23% of Small Business Owners Went a Year Without Pay
This is alarming and a clear indicator of a bad economy and maybe an indication of something worse.

Unless this is "normal" from past years and decades, we are in trouble and face the continuing threat of the largest corporations swallowing the small businesses.

Banks are tight with loan money too. Maybe they are holding out for higher interest rates.

Barack Obama has said the private sector is doing fine.

Tell that to small business owners; a new survey by Citigroup shows that 23% of small business owners have gone more than a year without pay. The study also says that 54% of them have gone without at least one paycheck; 38% of them said their employees had worked overtime without being compensated; and 18% of them had been unable to make a paycheck for their employees at least once.

During recent years, 78% of the owners have taken less profit, 70% have been working more hours, and 69% have used their own funds in order to keep their businesses afloat.

When asked what issues have been the most problematic for them, the owners didn’t rank their access to financing in the top five, instead claiming lack of sales and consumer confidence were the most troubling factors.

Some may even think that being a small business owner is worth less than just working there.

Maria Veltre, Citi's managing director of small business, commented:

“Business owners are wearing more hats, working more hours and taking less profit” to keep their businesses going. They don’t sit idle, they’re asking, ‘What do I need to do to make my business grow?’ There is a level of sacrifice small business owners take for their businesses.”

The small business owners are reluctant to borrow funds because they are worried about the costs of Obamacare and the financial hit the economy will take from expiring tax cuts.

different article from CNBC --> All Work, No Pay for Some Small Business Owners: Survey

For some reason, it seems to me that 23% isn't necessarily all that high. I would guess around 17% is normal considering how many small business there currently are. Breaking even for many, in a rough economy is hard enough. Now, just imagine what percentages of business are with in their first 3 years of creation at the moment.

I'm not going to pretend to know the numbers any further. LOL! But I'm sticking by my rhetoric!

If there is anybody that has the numbers, please deny my ignorance. Or make me look incredibly cool!


^^^ Like that guy

reply to post by xuenchen


Do you realize how many idiots start businesses? Aparently 23% has something to do with it.

I cant even count the amount of poorly managed resturants i know of, chain or otherwise. I get service from businesses that make me want to never return.. must happen to other people to.... strange huh?

The traditional answer is: you probably won't see sustainable profit for five years.

The optimistic answer is: it takes between 2-3 years to see sustained growth profit.

www.discoveringyourinnersamurai.com...


Charting Your Business Timeline - Year 1: Starting Up
www.entrepreneur.com...

The key to knowing which challenges are next is to look at your business's timeline. Depending on whether you're a startup, in the growing years from two to five, refining your approach from five to 10, maturing from 10 years on or in the final exit stage

..

Charting Your Business Timeline - Years 2 to 5: Time to Grow

With how many new opportunities are making their way to the public sector, via innovations of technologies. As well as the loss of jobs, especially those of positions that require the skills necessary for running a business... it would seem to me like there would be a higher amount of new small business'. I could be incredibly wrong though lol.

I can't find any 2010,2011,2012 numbers, any help?
Currently denying ignorance TBC

edit:
Uh, looking cooler by the moment:

“Compared to 2007, there was a huge increase in the number of business failures in 2008, 2009, and 2010. In fact, the number of business failures in 2009 was almost twice that of the amount of failures in 2007,” writes Byron Vielehr, president of global risk and analytics at D&B, in response to questions emailed by Portfolio.com. “However, 2009 and 2010 bore witness to the highest percentage of startups in more than a decade. The rate of new businesses had also been steadily climbing since 2006. As a result, the number of businesses in 2010 compared to 2007 is higher.”

Recession Brought a Small-Business Boom
upstart.bizjournals.com...

Originally posted by Wertdagf
reply to post by xuenchen

 

Do you realize how many idiots start businesses? Aparently 23% has something to do with it.

I cant even count the amount of poorly managed resturants i know of, chain or otherwise. I get service from businesses that make me want to never return.. must happen to other people to.... strange huh?

Interesting thought.

I wonder how many idiots are just managers for the chains.

Originally posted by Wertdagf
reply to post by xuenchen

 

Do you realize how many idiots start businesses? Aparently 23% has something to do with it.

I cant even count the amount of poorly managed resturants i know of, chain or otherwise. I get service from businesses that make me want to never return.. must happen to other people to.... strange huh?

I am quite familiar with a small business that went under but not because of bad service but because of not being able to meet price points being offered by companies like Walmart.

But, people shop their for convenience and because they think they get good service. The last time I was in there it was a self serve experience and the staff had no idea where simple items were.

Small businesses go under when they don't offer good service, but the majority of them were put under because people don't want to go to the little guy, they want a one stop shop or prefabbed dinner at a big box restaurant.

There is a Shawarma place I go to that sells a full sized shwarma for 3 dollars. Cooked fresh each day, made fresh in front of you. I'm surprised the guy is around because of how little he must be making. But I'd rather give it to him than buy a 6 dollar burger from McD's

Originally posted by xuenchen

Originally posted by Wertdagf
reply to post by xuenchen

 

Do you realize how many idiots start businesses? Aparently 23% has something to do with it.

I cant even count the amount of poorly managed resturants i know of, chain or otherwise. I get service from businesses that make me want to never return.. must happen to other people to.... strange huh?

Interesting thought.

I wonder how many idiots are just managers for the chains.

An unlimited amount. Almost every industry has been monopolized in today's times. Therefore, an idiot would suffice.

the information is coming from citigroup, that's one strike against it!!
and, new businesses usually take a few years to become profitable,

but on the other side of things, my experience kind of tells me that there is a problem.
my boss has seen the cost of materials, ink, felt, ect, increase 25% to 35% the past few years.
and my hubby's boss is one of those who are throwing their own money into the business trying to keep it running (can't say it's because of the cost of employees either, since there is only one employee that has been getting paid.)

Not surprising at all. Most start ups don't generate lots of revenue. Then couple this with the working class wages that have spent three decades stagnating and this is what you get. When you do what Romney likes to do eliminate well paying manufacturing jobs and replace them with minimum wage jobs at Staples there is just simply less people with money to spend with even less time to go out and spend it.

It's a shame a small business can't use the Citi plan.

-too big to fail so no consequences for bad decisions
-get money at near 0% rates, lend it at 15% to 20%+
-pay almost no interest on deposits (not needed anyway)
-help push cashless society so that rising costs simply bring in more from the cut from card processing fees.

Capitalism no longer wants us to shop small business. The markets don't invest in Joe's Hardware, they invest in Home Depot, Lowes and Wal-Mart.

They all want to just pay minimum wage, but somehow the big spenders with the big salaries have to come to their shops from somewhere. From where I wonder.

reply to post by xuenchen


Whilst this a very serious issue and small business owners the world over are currently fighting for survival, i call total BS on those figures. How can 23% have possibly gone a year without pay? That means nothing to buy food with, nothing to pay bills with (so no electricity, water, gas, etc).

I may well be missing something here though so please feel free to correct me.

reply to post by Flavian


There are things calls savings, part-time employment, and unemployment compensation that keep people afloat for periods of downtime you know?

I have been struggling with my business for quite sometime but I have no savings and no unemployment compensation to be had, so I break just above even on a month by month basis for overhead costs. I am a single man service operation as well. I could only imagine the hardships of having to deal with a workforce of multiple employees on top of all that AND to deal with a replenishing inventory in the event that you distribute products. It only gets worse.

I have been searching for part-time work, but jobs in my locale are a dirty word. With no additional money from extra work, and all business flow going towards overhead and keeping the business running, there is no money to go towards growing the business. Thus it is an viscous cycle.

I was a small business owner, 2006 was a pretty good year, 2007 was not as good, 2008 the wheels started coming off as your bills kept increasing and your revenue decreased dramatically, 2009 - nothing sold -- I lost about 35-40,000$ that year. 2010 another 20K lost as I made expenditure adjustments. at the end of 2010 - I threw in the towel.... so I would say I went 2 - 3 years without a pay check - I even wrote to the US Treasury asking for 160,000+ due to Federal Reserve Bank's Monkey Business - and they replied - get a lawyer ,,, I replied please show me an American Court in which I can sue them. because we do not have a imparticial Judicial System - as near as I can tell - they rule in a manner that makes me think it's Just Us ... not Justice.

I opened my business in 2003. best thing and worse thing I ever done - and I dont believe my management skills were at fault.

This is silliness. I own a couple of small businesses and have gone several months without "paying myself"...but the car, phones, insurance, medical expenses, etc are all through the business and thank goodness I had money stored up to see me through economic down-turns.

This is the nature of owning a business and the risk we take and we reap the rewards more than ost in good times.

These numbers do not fortell bad economic circumstances...they simply speak to the everyday reality of owning a small business...you only get paid if you actually make money...and none of your vacations or holidays are "paid" by anyone but you. When you stop working the business stops making money...when good times come, you keep all the profit, when bad times come you hope you saved enough of that money to see you through. Up - Down - up - down and you do it well enough where the up times outnumber the bad.

Silly, the way Briebart tried to spin this. Is President Obama supposed to take the risk out of owning a small business?

I know that my boss was living off his savings for a year or two, especially in 2009-2010. It was rough out there. It's still rough out there, but everyone is busting their a$$ to keep things alive. After all we've been through it's amazing we're still alive and kicking. The trick is to reinvent yourself. Instead of saying; "Well, people aren't buying our products anymore so I guess we'll just whine about how we're dying" we asked ourselves "if they're not buying what they used to, what is it they are looking for today?" We came up with a strategy and it worked well enough to keep us afloat until the worst is behind us. It wasn't easy, it was frustrating as hell sometimes to try new things, but here we are. Naturally we have no clue what's heading our way in the coming years, but we're prepared to morph and mold the company to the times again, if necessary.

reply to post by xuenchen


Other items revealed in the Same Survey...Sorry I had to actually google around rather than trust Briebart's...or the former Briebart site.

Percentage of U.S. Small Business Owners Reporting Positive Business Conditions Nearly Doubles Since 2010

NEW YORK--(BUSINESS WIRE)--Jun. 6, 2012-- Forty-three percent of small business owners consider business conditions to be positive, according to the latest Citibank small business survey released today. This is a significant increase since August 2010, when 24% of small business owners surveyed reported overall positive business conditions.

One-third (33%) of respondents said their own business is better than it was a year ago – up from 26% in January. Another 33% expect their business will grow by more than 10% this year.

Hmmm...your OP and "Briebart's" site left that bit out?

markets.on.nytimes.com...

Also here on "The Street"...
Percentage Of U.S. Small Business Owners Reporting Positive Business Conditions Nearly Doubles Since 2010

www.thestreet.com...

It seems your OP source is the only place that reads the Citi Survey as bad? Hmmmm...maybe they have an agenda?

Actually...I just found the actual Survey! And low and behold...what is it titled on Citibanks site?

Percentage of U.S. Small Business Owners Reporting Positive Business Conditions Nearly Doubles Since 2010
www.citigroup.com...

Funny how the OP/Briebart seems to read the survey differently than those who actually conducted it???

And strangely Obamacare, governemnt regulations etc...is nowhere to be found on the list of "challenges" small businesses face? Well actually not so strange, since I own a small business myself....that is idiotic GOP BS, a healthy middle class and a recovering economy is all small business owners want.

reply to post by Indigo5


Good information save I see they are reporting on their survey and not providing the actual survey. It would be nice to see what questions were asked, the cross-sections and industries they asked, etc. Again, good rebuttal but still just as spun-up as the OPs take.

The survey was 750 small business. "Small Business" is general defined as being less than 500 employees. A 2009 estimate put the number of firms that would fall under this definition at roughly 5.8 million firms. Couple that with an estimated polling error rate of 3.8% for "nation-wide" and 7.0% for "New York (200) and California (200) firms", I wouldn't put too much stance on it. That is just my opinion of polls though. Sampling just 1.3% doesn't convince me one way or another -- regardless of how it is spun.

This is normal.

I thought it was actually a hire percentage.