British business owners reveal the financial struggles keeping them awake at night

What keeps you awake?

A new survey of the UK’s business owners has put money matters under the microscope, with Brits sharing the financial struggles that cause the most sleepless nights.

1,000 British small to medium business owners were asked by finance specialist Solution Loans which money-related responsibilities associated with entrepreneurship they consider the most stressful - from generating profit and coping with late client payments to paying competitive salaries and investing in better business processes.

According to new research from KashFlow, Britain’s sole traders and micro businesses are spending a combined total of 19m hours every month on managing their finances - the equivalent of 2.5m working days.

Half of these business owners admitted they lack confidence when it comes to the financial side of entrepreneurship, with a third saying they feel “stressed” at the prospect - and this new survey hopes to dig deeper into the aspects of business accounting which Brits find the most nerve-racking.

Client retention is top of the list, with a whopping 64 per cent of respondents naming this the greatest financial stress that comes with business ownership.

Taking the second spot, effective cash flow management isn’t far behind - with 60 per cent of all voters (and 86 per cent of North West entrepreneurs) admitting they struggle with managing the flow of cash in their business. 

The bottom line

Unsurprisingly, many British business owners say profits are constantly at the forefront of their minds - with 58 per cent of entrepreneurs declaring the pressure to remain profitable particularly stressful.

52 per cent of those surveyed say late client payments wreak havoc with their company’s cash flow - compared with just 33 per cent of voters in London.

Maintaining the flow of new business is crucial when it comes to keeping one eye on a business’s bottom line - and 48 per cent of the UK’s entrepreneurs consider this juggling act one of the greatest stresses associated with owning an SME.

Bookkeeping basics

32 per cent of respondents struggle with the money-related responsibilities that come with business ownership, saying that they find understanding their financial situation a challenge in itself.

With bills, utilities, office rent and more to be accounted for, 31 per cent of participants say managing overheads is no easy feat - a financial factor which gives male entrepreneurs in particular cause for concern.

Female business owners, however, are more worried about their wage bill - with 39 per cent of women saying they feel the pressure to pay competitive salaries in order to hold onto top talent, versus just 19 per cent of men.

The budget squeeze

Arguably the greatest financial burden Britain’s start-ups face is the hunt for funding - especially as this cash injection can be vital when it comes to fuelling company growth.

In the same month that the Federation of Small Businesses (FBS) predicted a post-Brexit “business support black hole” by 2021, a quarter of survey respondents cited raising funds for launching and growing their business as a primary source of stress.

23 per cent of the UK’s entrepreneurs (and 57 per cent of those in the East of England) hate nothing more than when HMRC comes knocking - blaming unexpectedly large tax bills for their sleepless nights in the world of the self-employed.

Research and development is crucial to realising new ideas and refining company processes - but 23 per cent of respondents find the financial investment required to implement these forward-thinking business updates daunting to say the least.

Marketing budgets are also taking their toll on business owners’ budgets across Britain - with 17 per cent of participants saying they worry about the costs associated with boosting brand exposure.

With Britain’s startups facing tight budgets, cash flow balancing acts and increasingly unwieldy wage bills, it’s little wonder England’s entrepreneurs are eager to see new and inclusive small business funding programmes launched in the UK.

Topline results

Respondents were allowed to select multiple answers to the following question:

Which of these financial factors do you think cause business owners the most stress?

●       Losing existing clients: 64.0 per cent

●       Managing cash flow: 60.0 per cent

●       Continuing to remain profitable: 58.4 per cent

●       Late client payments: 51.9 per cent

●       Maintaining the flow of new business: 48.1 per cent

●       Lack of knowledge of company’s financial situation: 32.0 per cent

●       Managing overheads (e.g. bills, utilities, rent): 31.2 per cent

●       Paying competitive salaries (to retain top talent): 28.0 per cent

●       Finding funding: 24.7 per cent

●       Investing in new ideas and better processes: 23.4 per cent

●       Unexpected tax bills: 22.7 per cent

●       Funding marketing efforts: 17.3 per cent

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