Small business owners are running the risk of costly mistakes by failing to make use of expert advice when setting up their enterprises, according to new research.
A survey of 1,507 small and medium-sized enterprises (SMEs) for insurer Aviva found that two in five (38 per cent) relied on advice from family or friends, while only 13 per cent sought the advice of financial professionals, like accountants, nine per cent used legal advisers and six per cent insurance providers.
The research, published on 22 April, found that the top three hurdles when setting up a business were financial administration (32 per cent), marketing and sales (31 per cent), and understanding and fulfilling legal obligations as an employer or business owner (30 per cent). These remained the key challenges even when the business was established.
All were areas that those questioned had little or no knowledge of when setting up – three-quarters of SMEs said they knew little or nothing about bookkeeping or marketing and sales and 85 per cent very little about their legal obligations as an employer.
A key issue for expert advice highlighted by the Aviva survey was providing a workplace pension scheme, in line with auto-enrolment requirements.
A third of respondents had already implemented auto-enrolment and one in five (21 per cent) had yet to do so, but were aware of their obligations.
But more than a third (36 per cent) of micro employers, with up to five employees, did not think they needed to.
Angus Eaton, managing director of commercial lines at Aviva, said: “It’s only natural to want to consult with your family and friends but advice from professional experts can save time and money, helping small business owners with practical solutions.”
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