One-Third of Small Business Owners Forced to Take Second Jobs, Report Finds

A significant portion of small business owners, one in three, are compelled to work a second job to sustain themselves, according to a report by Enterprise Nation in partnership with Newable and the Association of Business Mentors. The report, titled "Mentoring Matters: Four Years On," reveals that these entrepreneurs often dedicate an average of 45 hours per week to their primary business on top of any hours worked at a second job.

The findings are drawn from over 3,400 responses across seven polls conducted since spring 2023. The report underscores the challenges faced by the UK's 5.7 million small businesses, which are frequently regarded as the foundation of the economy. These financial strains have led many to delay or cancel growth plans, with more than two-thirds (69 percent) of all surveyed small businesses reporting such actions in the past year. Half of these businesses have also cut investment opportunities.

Specific cost pressures identified include employer National Insurance contributions, business rates, supply costs, and energy bills. Value Added Tax (VAT) was cited by six in ten businesses as one of their top three financial pressures.

High Street Struggles and Potential Relief

A September study, "Growth on Hold," previously found that 22 percent of UK-based small business owners reported more than a quarter of nearby shopfronts were vacant. This report also indicated that 64 percent of respondents believed Britain was a more challenging environment for business operations compared to its European counterparts. More than three-quarters (77 percent) of high street businesses had postponed growth plans, and 42 percent had reduced customer-facing staff.

High street firms are particularly affected by business rates, with 67 percent paying them, compared to only 21 percent of businesses in other sectors. In anticipation of the upcoming budget, there is discussion about potentially reducing business rates for thousands of small businesses to help revitalize high streets. Chancellor John Healey is reportedly considering changes to business rates relief, which could exempt certain businesses from the tax entirely. Possible options include increasing the threshold for Small Business Rates Relief (SBRR) to exempt firms in properties with a rateable value below £12,000, or introducing tapered relief for properties up to £20,000.

The Role of Mentorship and Support

The "Mentoring Matters" report also shed light on the need for business support and mentorship. Nearly three in five (57 percent) of small business owners have never had a mentor, a figure that rises to 63 percent for sole traders. Of those who have taken on a second job, 44 percent initially started their business as a side hustle.

When seeking assistance, over half (56 percent) of mentored owners looked for business support in the last year, compared to 43 percent of those without a mentor. Many turned to online resources, with 77 percent consulting private-sector business support services and 63 percent using government websites. Business books, podcasts, and social media were also common sources of information.

Despite these efforts, 24 percent of owners who sought support found that they could not find anything suitable for their needs. The report suggests a correlation between mentorship and growth expectations: 53 percent of mentored entrepreneurs anticipate hiring new employees in the coming year, versus 36 percent of those without a mentor.

Enterprise Nation CEO Aaron Asadi noted the significant changes in the business landscape since 2022, with owners facing persistent cost pressures, operating leaner, and making critical decisions without external guidance. Lord Leong, Minister for Small Business and Enterprise, emphasized the value of experienced mentors in providing confidence, practical insights, and encouragement to entrepreneurs.