Why start ups should seek early expert advice
Many small businesses in the UK fail to take advantage of professional services during their early days, leaving many counting the cost of expensive mistakes, new research has revealed.
According to Aviva, 38% of start-up bosses turn to friends and family for advice rather than approach experts.
Just 13% of business owners questioned revealed they used a financial advisor while that figure fell to 9% who use legal advisors.
Only 6% revealed they asked insurance providers for advice too and given the minefield of legislation that surrounds business it is leaving many at risk.
Among the main hurdles faced when creating a business were financial administration problems and issues relating to marketing and sales – named by 32% and 31% of start-ups respectively.
Understanding and meeting legal obligations was also an issue for three in ten people starting a business, according to the study.
Three quarters of SMEs also admitted to knowing little or nothing about bookkeeping, marketing and sales while 85% knew little about their legal requirements.
Among these are issues such as insurance and pension auto-enrolment, with one in five yet to set up a workplace pension despite knowing they need to.
While getting the main aspects of a company up and running is important, all of the hard work could be undone by costly issues further down the line.
Fines for not following legislation or a lack of sales could ultimately leave a new company facing business insolvency at a very early stage.
Seeking advice from financial advisors and experts in other fields could help to boost understanding and reduce the likelihood of facing financial difficulty.
This provides the potential to save both time and money and ensures that businesses are slightly more prepared for some of the challenges they could face.
It’s also possible to draw on past experiences from businesses that have already faced up to challenges, enabling new companies to tackle problems in a different way.
By Phil Smith