One in three small and micro businesses have failed to grow in the past five years, according to AAT (Association of Accounting Technicians).
The study of 1,000 small and micro businesses across the UK discovered that 33% have failed to experience growth in revenue, whilst 31% haven’t experienced an increase in profits since 2010.
When asked what factors have been holding their companies back from expanding, the reasons business owners gave are:
- A lack of capital to expand
- Too much red tape
- A lack of support from banks
- 31% said more effective marketing, PR or a stronger web presence
- 19% said expansion into new markets
- 16% said more support from the government, such as funding, tax breaks or training opportunities
- 9% said a more simplified tax process
Yet despite the optimistic sentiment, a staggering 58% of small and micro business owners admitted to not having a business plan to help them grow, with 10% saying they wish they have one but do not know how to put one together.
Mark Farrar, chief executvie of AAT, said: "Growing your company can be one of the hardest stages in the life of a business but with the right skills it can be done. Growth can put pressure on cash flow which is why many businesses fail when they're expanding. Having the necessary financial skills and a clearly defined business plan are essential tools to help firms expand successfully."