Two fifths of UK SME owners admit to being in financial trouble
New research by a money saving website in the UK has revealed that two fifths of SME owners who set their companies up in the past three years are already finding themselves in financial trouble. According to the poll, 52% of these people admit that they got a bit carried away with spending on equipment and supplies, with a further 48% admitting they rented or purchased an expensive property.
A new poll by a money saving website in the UK has uncovered that two fifths of UK SME owners admit to being in financial trouble, with as many as half of these admitting they don’t think their company will bounce back.
VoucherCodesPro.co.uk conducted the research as part of an ongoing study into the financial circumstances of both individuals and business around the UK. 732 British SME owners, all of whom had launched their company within the past three years, were quizzed about how they found running their start-up.
Initially all respondents were asked What was your main reason for setting up your own company? To which the most popular responses were I wanted to be my own boss (37%) and I wanted the flexibility to work as and when I wanted, for my family (32%). 21% said they wanted to get rich. All respondents were then asked about the financial state of their company, to which two fifths, 42%, stated they were in financial trouble and only a third, 33%, stated that the company’s finances were going from strength to strength.
All business owners who stated that their company was in financial trouble were asked what they thought had gone wrong and what they’d change if they had the chance to go back and do it again. When provided with a list of possible responses and told to select all that applied, the top five answers given were as follows:
– Got carried away with spending (i.e. equipment and supplies) (52%)
– Rented/purchased an expensive building (48%)
– Hired too many staff, too soon (39%)
– Didn’t charge enough for services or products (38%)
– Couldn’t get enough business/clients/customers (33%)
According to the poll, out of those who admitted to being in financial trouble, 51% admitted that they weren’t sure if they could bounce back and save their company. Of these people, 25% were optimistic that they could learn from their mistakes and would look to set up another company when the time was right.
All respondents were then asked do you regret setting up your own company? To which one quarter of respondents, 26%, stated yes. Similarly, all respondents were then asked if they would ever consider working for a company where they weren’t the boss, to which 82% of respondents said no.
Nick Swan, founder and CEO of VoucherCodesPro.co.uk, said: “Launching your own company is always going to be a massive risk, whether it’s your first time or you’ve got a whole portfolio of successful businesses. It’s about believing in yourself and venturing out to try something new and show the world what you’re made of. Like the results of this study show, even if the company does fail, it’s not necessarily a failure if you learn from the mistakes you made and try again. Business is unpredictable, it always has been and always will be, and the economy doesn’t always help, but you won’t know if you can do it unless you try.”