The study, commissioned by specialist business insurer Hiscox, found the UK's small businesses in bullish mood with almost half (48%) having taken no additional measures to ride out the downturn. Even those that have been forced to take action have avoided more drastic measures:
Almost nine out of ten (88%) have not enforced salary cuts, while 87% have continued with bonus payments
More than four in five (85%) are still wining and dining clients and staff, and have made no cuts to entertainment budgets
Eight out of ten (82%) are continuing to spend the same amount as previously on office maintenance
Unlike larger companies, the UK's small businesses have also for the most part been able to avoid redundancies, with less than one in ten (9%) opting for layoffs
Almost all (95%) have avoided slashing insurance cover to cut costs
Despite this seemingly confident outlook, the majority of SMEs think the recession will continue beyond 2009 - less than one in ten (7%) believe that the economy will improve by the end of this year. In fact, almost half (45%) don't predict a recovery before September 2010, while a more pessimistic quarter (23%) believes Britain will be mired in recession until 2011 or beyond.
Alan Thomas, small business insurance expert at Hiscox UK, said: "SMEs are an integral part of the UK's business landscape and an important indicator of the health of the national economy, so it's good to see that many are so confident about their survival prospects and have avoided some of the more difficult measures such as salary cuts and redundancies.
"That a large percentage are also choosing to maintain their levels of insurance cover is also reassuring given that in this downturn we are seeing an increase in professional liability claims which reflects the increased litigation that always comes hand in hand with a recession. The fact that a majority of SMEs surveyed believe that the downturn in the UK shows no sign of abating, makes it more important than ever for businesses to ensure they have sufficient cover."
The study also uncovered the key indicators that the UK's SMEs say will show them that the recession is coming to an end, with over two thirds of small businesses claiming that an increase in demand for their products and services (64%) and new business opportunities (47%) will be the most telling ‘green shoots'. A third (30%) of SMEs say that they will take their lead from positive media coverage, while one in five agree with the Federation of Small Businesses' assertion that access to credit will be the most important sign that the downturn is over.
