Still deciding about outsourcing your bookkeeping services (accounts)
1. Are you classed as a Small or Medium-Sized Business (SME)
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There were 5.9 million private businesses in the UK at the start of 2019. More than 99% of which are small or medium-sized businesses (SMEs) according to the Department for Business, Energy & Industrial Strategy.
SMEs, which are defined as businesses fewer than 250 employees, accounted for 60% of all private sector jobs in the UK, a total of 16.6 million. Make no mistake about it, SMEs are crucial to the UK’s economy and their contribution is increasing every year.
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Of these small businesses more than 76% are single-person enterprises with no employees (4.458 million). Add this to the 1.155 million micro-business (1-9 employees) and it turns out more than 95% of businesses in the UK employ fewer than 10 people.
That’s quite a lot of statistics we’ve just thrown at you so let’s just have a quick recap of the key figures:
99.9% of all UK businesses are classed as SMEs (0-249 employees)
0.6% are medium-sized businesses (50-259 employees)
Less than 4% are small businesses (10-49 employees)
More than 95% are micro-businesses (0-9 employees)
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The 4 regions above the national average are London, South-East, South-West and East of England with London being the fastest growing region increasing by 52% since 2010. This roughly means that a third of all UK businesses are located in London or the South-East.
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2. Is your Small Businesses built to last the test of time
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According to the latest figures from the Office for National Statistics released in November 2019, only 42.4% of businesses started in 2013 were still trading five years later in 2018. Almost half of businesses make it to their fourth year (49.3%) while the percentage of enterprises that survive for two years has dropped to 68.3%.
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Sectors with the highest new start-up businesses are Retail, Accommodation and food services, business administration and support services and transport and storage ranging from 12.1% to 16.5%. These businesses also account for the highest sectors of failed businesses ranging from 15.5% to 17.8%.
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3. Is Getting Paid Still A Problem For your Small Businesses
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Unfortunately, attracting customers is not always enough for businesses because it turns out getting them to pay can be a real problem, too. Research from the Federation of Small Businesses (FSB) indicates that poor payment practices, such as late payments, affects 80% of the UK’s small business community. FSB also calculates that late payments to SMEs costs the UK economy as much as £2.5 billion every year and causes 50,000 small firms to collapse on an annual basis. Another issue is that small business are not keeping up with the latest payment technology. Things like contactless payments and the ability to take payments instore, over the phone or online.
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4. Are you underestimating The Costs Of Running A Business
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According to the 2019 Intuit Cash Flow Survey, 69% of small business owners say they have been kept up at night by concerns about cash flow.
This really is not a good way to get things started. Do you know that late payments are a major problem for SMEs in the UK. This issue is compounded with the challenges of accurately estimating the running costs of an enterprise – especially in the first year of operation.
Some of the start-up expenses being:
Premises
Utility services
IT equipment
Office furniture
Branding
Marketing
Professional fees
Wages
If some or all of the above points resonate with your business follow this link for 7 benefits of outsourcing your bookkeeping services (accounts)