Half of small firms ‘maintaining profitability’

Nearly half of small businesses have maintained their profitability in the last 12 months, new research has found.

According to a study by Kingston University, the majority of small firms have used their own cash to help them weather the recession.

Of the 343 small businesses questioned, 48% have either sustained or increased their profitability, while only a quarter reported a significant dip in profits.

‘More than half of small business owners survived the recession and the squeeze on credit by using their own savings and personal credit cards,’ the research stated. ‘This finding is a clear contradiction that all small and medium-sized businesses would suffer heavily in the downturn.’

It comes in the wake of criticism from the Government’s enterprise tsar, Lord Sugar, who recently labelled struggling small business owners as ‘moaners’.

‘I can honestly say a lot of problems you hear from people who are moaning are from companies I wouldn't lend a penny to,’ he said. ‘They are bust and they don't need the bank - they need an insolvency practitioner.’

His comments have sparked a backlash from entrepreneurs and small business representatives. Phil Orford, the Chief Executive of the Forum of Private Business, said Lord Alan's remarks were 'misguided' and showed a 'worryingly dismissive' attitude to small firms.