In a recent report issued by The Institute of Chartered Accountants in England and Wales (ICAEW), small business start-ups were called upon to improve their cash flow management skills in an effort to avoid burning through their financial resources at too fast a pace.
This consideration came as a result of a survey conducted by the ICAEW whereby 23 percent of all small business advisors surveyed said that proper cash flow management is the biggest hurdle start-ups have to overcome in their business, but just 16 percent of start-up entrepreneurs who were asked the same question believed this to be among their chief concerns.
Ahead of proper cash flow management, the survey uncovered that 28 percent of the start-up entrepreneurs surveyed claimed that not getting enough customers and a failure of their business to make enough money caused them the most concerns.
These skewed perceptions and false assumptions of what allows a start-up to remain in business can be damaging to the prospects of, well, exactly that.
Referencing the report, director of business at the ICAEW Stephen Ibbotson noted that “Entrepreneurs’ perceptions of what they think will be the challenges they face as a start-up and the reality they actually encounter are very different. These false assumptions can often lead to businesses not fulfilling their maximum potential and at worse, failing completely.”
However, there is some cause for hope. Of the start-up entrepreneurs surveyed by the ICAEW, 68 percent agreed that working with an experienced business advisor is ‘extremely useful’ for any start-up business.
5.5 Million Private Sector Businesses
A Government report released earlier this month stated that there are now 5.4 million private sector businesses in the UK; a new record; with this figure accounting for 900,000 new businesses since 2010.
The report also stated that small businesses contribute 48 percent of all private sector employment, adding £1.2 trillion turnover to the British economy. With 75 percent of start-up entrepreneurs surveyed by the ICAEW claiming that starting up their business was more difficult than they originally thought it would be, the importance of proper cash flow management is more crucial than ever.
Experienced Start-Up Accountants
Here at Tax Agility we do more than just prepare your accounts. Our experienced start-up accountants can work with you to improve your cash flow management processes, all while providing appropriate advice surrounding the financials of your business. If your cash flow management system need an entire overhaul, we can even work with you to prepare budgets and cash flow projections to get you back on track.
To speak with a professional accountant to discuss how we can improve your cash flow management processes, or for anything else, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.