Payroll

Micro business owners increasingly work for free to get their foot in the door?

Fred Heritage | 22 June 2016 | 8 years ago

plumber
Micro business owners frequently do not receive payment for the services they provide
Over a quarter of micro business owners in the UK feel it’s necessary to work for free when starting out, according to the results of a new survey.

As many as 63 per cent of owners of the country’s smallest firms have at some stage been forced to work for free, in order to get their foot in the door? with clients. A further fifth are asked to work for free on a monthly basis, while 53 per cent are asked annually.

The revealing results of a OnePoll survey amongst 500 micro firm owners found that just a quarter would refuse to work without the promise of pay, whilst 20 per cent admitted to working for free in the past but said that the practice was unfair.

Commenting on the survey results, ambassador for new micro business representative body Chorus which commissioned the research Jason Kitcat, said that the services of micro businesses were being undervalued, and that owners were being exploited.

working for free shouldnt be necessary, the time and effort of micro businesses should be valued like any other, he said. Micro firms employ 8.4m people and account for 96 per cent of all British businesses, yet too often they are being taken advantage of, on the promise of future publicity and business.

In February, Business Advice discovered the extent to which Britain’s freelancers also often work for free. Unpaid overtime was found to result in freelancers getting paid for just two-thirds of the work they should be paid for, according to data collated by FreeAgent.

Despite these payment trends, Britain’s smallest businesses are contributing to the economy now more than ever. Recent statistics from Direct Line revealed that there are now 34 micro businesses for every 1, 000 people in the UK, with London and the South East of England home to almost a third.

Suggesting that the environment for entrepreneurship in the UK remains far better than elsewhere in Europe, Direct Line research published in January found that micro businesses in London were more to thrive than in other major European cities.

Between January 2014 and July 2015, just 0.39 per cent of London-based micro firms folded, compared with 2.95 per cent of in Paris and 0.7 per cent in Berlin.

Read on to find out why late payments are wreaking havoc amongst Britain’s freelancers.

Topic

Payroll

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