Although smaller companies report business conditions have grown more positive in recent years and cite an optimistic outlook for the future, many small business owners have made serious personal sacrifices to ensure their businesses stay afloat, new research shows.

Business activity has been trending upward among smaller firms in the United States as the economy continues to rebound from the downturn, but many small business owners and entrepreneurs have had to make significant personal sacrifices to help their companies survive and prosper through difficult times.

According to the latest small business survey from Citibank, 43 percent of small business owners consider economic conditions to be positive today, up considerably from the 24 percent who said the same in August 2010. Thirty-three percent of respondents said their own company is performing better than it was a year ago, up from 26 percent who said the same in January, while another 33 percent expect their business will grow by at least 10 percent in 2012.

Despite the significant improvements in optimism and business activity, the nationwide survey of 750 small business owners also found that many employers – and employees – made considerable sacrifices to help their companies endure a challenging economic climate. Seventy-eight percent of owners said they took in less profit to help support their business, and 66 percent of those did so to provide pay for their employees and avoid layoffs. Seventy percent said they worked more hours than usual and avoided vacation days or taking time off.

“Small business owners risk everything to pursue their dreams and are willing to do what it takes to make it,” Maria Veltre, managing director of Citi Small Business, said in an announcement of the findings. “Their personal sacrifices, passion and ability to adapt have positioned them to capitalize on improving business conditions.”

Perhaps the biggest sacrifices have been in compensation. Citibank found that the majority of small business owners (54 percent) went without a paycheck at some point in the past few years in order to keep their business running, while nearly a quarter (23 percent) went without pay for a year or more. In addition, 69 percent of owners said they have used their own money to help their company survive.

“Previous reports of tight credit for small business owners could be one reason that owners are going without paychecks,” CNBC’s Small Business blog reports. “But a reluctance to borrow is another. As fears loom about what Obamacare and expired tax cuts could mean for their bottom lines, many are avoiding the idea of taking on more debt.”

These efforts have not gone without notice, however, as 80 percent of small business owners said their employees appreciate the sacrifices made to keep their business running. Many employees have also returned the favor, with 38 percent of respondents reporting that employees have worked extra hours without pay and 18 percent citing employees who have voluntarily missed paychecks or had paychecks delayed.

“To show their own appreciation of employees, small business owners offered additional time off (78 percent), a bonus (74 percent) or a raise (70 percent),” Accounting Today notes. “Customers, too, appreciate the stress and sacrifice of running a company. Almost seven in 10 (69 percent) of survey respondents said their customers recognize and appreciate their sacrifices. Even more (87 percent) say they have been thanked by customers.”

Escalating market competition has had a dramatic effect on the small business sector. With 38 percent of respondents to the Citibank survey describing the current competitive climate as “extremely intense,” the majority of small business owners (53 percent) said they have had to reinvent their business “to stay afloat or competitive.”

Among the leading strategies for reinventing their company, owners cited: overhauling the products or services offered (47 percent); adjusting infrastructure through technology or staffing changes (24 percent); boosting sales and marketing efforts (18 percent); reducing pricing (7 percent); and relocating facilities (3 percent).

Regarding their plans for the remainder of 2012, 65 percent expect to further increase marketing, 56 percent will work to find lower prices for expenses, 52 percent plan to work even longer hours, 50 percent will introduce new products or services and 49 percent will use social media to increase awareness of their business.

“The level of appreciation shown to small business owners by employees and customers is uplifting,” Veltre added. “We encourage everyone to thank their favorite small business owner. Small business is a highly personal undertaking; to the small business owner a simple, personal gesture of appreciation goes a long way.”