Tax complexity among biggest headaches as two-thirds of UK entrepreneurs bemoan ‘pain point’ obstacles to business growth
New research released today shows that the complexity of the tax system, marketing and generating sufficient cash flow are proving to be the biggest pain points for Britain’s self-employed.
In total, almost seven in 10 (68 per cent) of Britain’s entrepreneurs say that they have experienced barriers to growing their business. This ranges from struggling with late payments to finding clients.
As part of wider research into the self-employed market, challenger bank Aldermore, asked businesses what the biggest pain points were when launching and then growing their business.
From a start-up perspective, in addition to finding new clients and marketing, understanding tax requirements, chasing invoices and balancing business and personal finances were the biggest pain points. Similarly for growing businesses, the on-going need to get clients to pay invoices on time is leading to issues with cash flow and dealing with unexpected costs.
Aldermore believes there are two products that the Government should consider introducing to help entrepreneurs manage their finances:
Aldermore’s head of savings, Ewan Edwards said: “It is understandable that finding clients and marketing are clearly the biggest pain point for start-ups and growing SMEs alike as, without clients there is no business.
“However, it is interesting to see that the financial side of business is also a significant pain point for those setting up their own firm. Understanding tax, legal and accounting issues is a huge learning curve for any start-up. Cash flow and managing invoices remain an issue for many growing businesses, who may find themselves unable to service clients or orders if they are not paid within agreed timescales.”
Aldermore’s research shows that one-third of people (33 per cent) are considering starting their own business in the next couple of years. There is a significant opportunity for Government to provide additional support to start-ups as well as existing SMEs to help build up savings and business resilience in those early years.
Edwards added: “We want to back Britain’s entrepreneurs and think that by helping ‘would be’ and new business owners to build a sufficient savings pot, it would help them in those early years to adapt and deal with potential financial issues.”