Research has found that over 40% of small business owners who set up their business in the last three years are experience financial difficulties.
Of these struggling businesses, 52% hae admitted to not budgeting correctly when it came to supplies and equipment, with a further 48% confessing to renting or purchasing an expensive property as a status enhancers, says a study by VoucherCodesPro.co.uk
This information was produced by an ongoing study into the fnancial circumstances of businesses across the whole of the UK.
All respondents had launched their company in the last three years. The two most popular responses to the question “What was the main reason for setting up your own company?” were:
- “I wanted to be my own boss.” (37%)
- “I wanted the flexibility to work as and when I wanted, for my family.” (32%)
21% said that their primary motivator was that they “wanted to get rich”. All respondents were quizzed about the financial state of their business, to which 42% responded that they were in “financial trouble”, with only 33% could confirm that their business’ finances were “going from strength to strength”.
Of the business owners who claimed that their company was experiencing financial diffculties, there were follow-up question about what they felt had gone wrong and what they should have done differently with hindsight.
Aside from the overspending as detailed above, other popular answers included:
- Hiring too many staff too soon (39%)
- Not charging enough for services or products (38%)
- Not being able to get enough business/clients/customers (33%)
Additionally, 51% of those who confirmed financial troubles also said they they were unsure whether or not they could bounce back and save their company. Of these respondents, 26% said that they regretted started their own company.
However, when all respondents were asked if they could ever consider working for a company or business where they weren’t their own boss, an overwhelming 82% responded that they could not.
Nick Swan, founder and CEO of VoucherCodesPro.co.uk said:
“Launching your own company is always going to be a massive risk, whether it’s your first time or you’ve got a whole portfolio of successful businesses. It’s about believing in yourself and venturing out to try something new and show the world what you’re made of.
“Like the results of this study show, even if the company does fail, it’s not necessarily a failure if you learn from the mistakes you made and try again. Business is unpredictable, it always has been and always will be, and the economy doesn’t always help, but you won’t know if you can do it unless you try.”
Words: Peter Cribley