Nearly two thirds of Britain’s microbusinesses rely on support from friends and family to run their business, new research has revealed. Friends and relatives put an average of six hours a week into helping these microbusinesses stay afloat, the latest Big Issues for Small Businesses report from Lloyds Bank Insurance claims.
Whilst four out of 10 microbusinesses pay their family and friends with an average salary of £14 per hour, just over half said this support is unpaid.
This support ranges from helping to make business decisions (40%), completing practical tasks (34%), running errands (29%), managing social media accounts (10%), and helping with childcare (8%). While partners are most likely to head up the family support economy (43% of businesses are helped by their other half) one in five (19%) also rely on their children, and almost three in ten (29%) use friends.
The benefit of this help lifeline is keenly felt by the nation’s microbusinesses, with the vast majority (84%) saying the contribution of friends or family has had a positive impact on their business. Aside from increasing revenue (13%), increasing productivity (25%), making the business more manageable (35%) and providing emotional support (30%), nearly a quarter (24%) feel the help of friends and family is crucial in keeping their business running.
One in 10 (10%) microbusiness say their business would not be able to go on without this support.
Damien McGarrigle, head of business insurance at Lloyds Bank Insurance, said: “Starting up and running a business can be all-consuming, with family and friends often rallying around small business owners to ensure they are successful. However, microbusiness owners cannot solely rely on personal contacts to ensure everything runs smoothly.
“Our research found that a third of those polled experienced problems in the past year from technology failures to employee sickness which resulted in more than a quarter operating at reduced capacity, so it is vital for business owners to know their options and have the right insurance in place to safeguard their business.”
The report highlighted a knowledge gap when it comes to protecting their business, with a quarter (24%) of microbusiness unaware that having certain types of relevant insurance for their business is a legal necessity, for example having employer liability if the business employs staff. ----------------------------------------------------
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