More education needed for new business owners
By Beth FisherFewer UK businesses would fail if owners had more education on the process of setting up in business, according to research by Just Cashflow…
Fewer UK businesses would fail if owners had more education on the process of setting up in business, according to research by Just Cashflow.
Alternative lender Just Cashflow recently spoke to 250 small business owners, of which 80% admitted they did not know everything they needed when setting up their businesses.
63% of SME owners believed fewer UK businesses would fail if owners had more knowledge of the world of business before setting up for themselves.
Almost half of business owners admitted they lacked knowledge when it came to financial and business planning.
SME owners also revealed that cash flow management was the main area of concern (36%) they wished they had known more about before starting their business, with finance (30%) shortly behind, planning at 29% and forecasting at 23%.
Holly Porter, Director and Founder of Surface to Air Architects, initially set up in business with little knowledge and experience 11 years ago.
“To be honest I knew absolutely nothing about basic business planning when I started the business so there are a lot of things I wish I knew before setting up,” said Holly.
“Especially how difficult it is to get paid - the reality is that just giving an invoice for a service you have provided, doesn’t automatically mean they’re going to pay it.”
14% of those surveyed admitted to making mistakes that had put their businesses at risk due to lack of business knowledge.
10% had made errors that cost their business dear.
“We get to see many excellent applications for finance but unfortunately we also receive requests from directors that clearly don't understand basic business fundamentals,” commented John Davies, Director of Just Cashflow.
“Our experience and this research shows a national qualification for Directors would be really beneficial.
"A report from October 2014 revealed that over half of UK start-ups fail in the first five years and I believe a lack of business education is the key reason behind this shocking statistic."
Keywords: Just Cashflow, SME, Education, John Davies, Director, Report, Business, Planning