A study by The Association of Accounting Technicians (AAT) shows that while 22% of those in need of financial advice would ask an accountant, almost as many – 19% – would simply Google it.
A significant number of small business owners say their lack of financial knowledge was the biggest early hindrance to their success, according to new research.
However, despite their admission that financial knowledge may be lacking, only 11% said they wish they had spent more time on finance at first when starting out, compared to 19% who said they would have spent more time on marketing to help generate leads for their business.
In the study, 8% said they would have spent more time on IT, and 5% on PR and social media.
Reacting to the Association of Accounting Technicians figures, Valerie Wain, a director at Hallidays, said: “Setting up a new business is daunting. It is so important that when you start a business you don’t just work in the business but you put time aside to work on the business.
“It’s imperative for any business that you have a purpose and a vision, without this you are directionless.
“A business needs structure and this includes working on the business systems so the business itself is not directly reliant on the owner.
“By putting effective systems in place you are ensuring the business will succeed and it becomes less reliant on owner input to get tasks completed.
“This not only makes the business efficient but it enhances the value of the business. As the business grows so will its systems and as such it is important that owners concentrate on the key success drivers.
“Whilst accounting information is needed, it is historical in nature and events that happen now, may only appear in a business figures until sometime down the line.
Hallidays’ provide a Business One Page Plan – BOPP – service to help set up ‘key drivers’ for a business that prompts businesses to take action when they underperform.
Valerie adds: “Each one page plan is unique to the business and does involve monitoring the key financials such as net profit and sales, cost and cash predictors such as wages and debtor days.
“Additionally sales and marketing predictors such as meetings per month and conversion rates. Success predictors would look at the happiness or your team and customers which should be measured.
“If your team are unhappy then this will have a knock-on effect with your customers.”
Commenting on the research findings, Rob Alder, head of business development at AAT, said: “Starting your own business can be a daunting process.
“This research shows that many people who want to run their own business may need more help when they’re starting out.
“If you have a business idea, it’s essential you do as much research as possible to ensure your idea has the best chance to succeed.
“Being confident in yourself and your idea is excellent, but you should still ensure you get as much advice as you can, from multiple sources.”