Small businesses in the UK are facing significant financial losses due to a lack of time needed to manage their expenses effectively. A recent study conducted by researchers surveyed 500 SME owners and decision-makers, revealing that these businesses are losing an average of nearly £350 per month, amounting to around £4,000 annually because they do not have sufficient time to review their spending habits. The research also indicated that a considerable majority (68 per cent) of small business owners have not updated their financial management strategies in a significant period. However, there is a strong willingness amongst them, with 89 per cent willing to embrace new approaches and 57 per cent already turning to technology to streamline their financial processes and enhance productivity.
When it comes to scrutinising their operational costs, the study highlighted that over a quarter (26 per cent) of SME owners struggle to find the time to properly assess their energy bills, while 20 per cent express a desire for more capacity to focus on software and technology aspects. A prevailing issue identified in the research is a ‘forget-to-cancel’ culture, where time constraints lead to automatic renewal of subscriptions, resulting in increased expenses for 24 per cent of small business owners. Furthermore, 41 per cent have paid for subscriptions they did not use, 39 per cent have overlooked renewal notices, and 45 per cent have missed subscriptions due to their minimal costs.
The study, commissioned by Smart Energy GB, aims to assist small business owners in navigating their financial challenges. Collaborating with Nisha Katona MBE, founder of Mowgli Street Food and a TV presenter, the initiative has introduced ‘The Accuracy P.L.A.N.: Why It Pays To Know Your Bills’ as a free resource to help SMEs better manage their business expenditures. Nisha Katona highlighted the importance of monitoring bills, citing her own experience where installing smart meters in her restaurants enabled her to gain insights into energy usage, leading to significant cost savings and operational improvements.
Energy bills emerged as the top concern for business owners, with 43 per cent citing them as a major worry. Despite this, 22 per cent admitted not reviewing their energy supplier for over a year. The research also indicated that 31 per cent believe they could reduce energy costs if given more time. Other potential areas for savings identified included insurance premiums (23 per cent) and broadband expenses (20 per cent).
Victoria Bacon, Director at Smart Energy GB, stressed the significance of smart meters in aiding small business owners in saving both time and money. By automatically sending readings to energy suppliers, smart meters eliminate manual readings and estimated bills, providing data that can guide owners in identifying cost-saving opportunities and gaining better control over their energy expenditure.
Managing finances can be a taxing endeavour for small business owners, with 41 per cent of respondents reporting an average of five or more sleepless nights per month due to financial concerns. Over a quarter (28 per cent) feel overwhelmed daily by the multitude of tasks and administrative responsibilities associated with running a small business. Survey results indicated that implementing simple processes such as monthly expense reviews or comparing supplier costs could aid these owners in better financial management.
Financial Expert, Actress Nisha Katonamade the following suggestions for small business owners:
– Set clear financial goals
– Maintain accurate financial records
– Get a smart meter installed
– Encourage energy-saving habits
– Educate your team on energy efficiency
– Invest in energy-efficient equipment
In conclusion, small businesses are grappling with financial challenges due to time constraints, but with the adoption of efficient financial management strategies and the integration of technology, these businesses can navigate their expenditures more effectively, leading to long-term sustainability and growth.