By Daniel Hunter
The ‘can do’ attitude that entrepreneurs need to survive and thrive could also be their Achilles heel, according to new research released by specialist insurer Hiscox.
The research found that despite 71% saying that legal and 43% saying that accounting issues should be handled by a professional, only 30% of small business owners actually employ full and/or part time help in these areas of expertise.
When asked which area of running a business they lacked the most knowledge of, over half of respondents said legal (52%) followed by taxes (42%), IT (22%), insurance (19%) and sales and marketing (23%). But over three quarters (77%) do not believe this to be a threat to their business, and 36% are determined to find a way through any problems themselves.
Over a third (35%) of small business owners say their passion for their idea gets them through the pressures of day-to-day management of their business and 48% believe pressure is what they signed up for when they started out.
“We know that entrepreneurs are committed to giving their businesses nothing less than a hundred per cent and they are often stretched to become a ‘jack of all trades’. Our research shows there could be a skills gap between what they admit they lack knowledge of, and what they are willing to invest in,” said Deepak Soni, small business insurance expert at Hiscox.
“There comes a point when small business owners need to trust other experts to help them with the more complex and technical issues associated with running a business.”
Despite the potential hazards of legal and financial errors, more business owners employ an office manager than an accountant and/or in-house legal counsel (19% vs. 5%). Although, if they could employ another person, 18% believe that the professional assistance that would be most valuable to their business would be an accountant/lawyer.
The research also found that business owners handle the majority of office tasks including:
· Ordering supplies 80%
· Filing 77%
· Paying invoices 71%
· Preparing invoices 70%
· Printing/ binding documents 70%
· Opening the business in the morning 67%
· Closing up at night 66%
· Cleaning the office space 58%
· Reception duties 54%
· Customer deliveries 49%
“It is important for entrepreneurs to recognise when they need to seek out expert advice and support so they aren’t opening themselves up to business critical risks," Deepak Soni added.
"For example, a badly worded supplier contract could lead to disputes down the line that could end up breaking the bank or the relationship.”
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