News for 19th July 2011 :: What's Stopping Start-ups?
Research by NatWest and small business website Smarta.com reveals many London based small firms struggle early on because they don’t have the right tools in place to run their business effectively. With latest figures showing business failures outnumbering business births for the first time*, offering more support to start-ups could be key to economic recovery. NatWest and Smarta have joined with Dragons’ Den star Theo Paphitis to launch Smarta Business Builder, a new online toolkit, providing first time entrepreneurs with the key components needed to develop and grow.
Of those London based small businesses surveyed 76% - the highest figure in the UK - stated that cashflow was one of their most significant challenges in their first year of trading. Many local businesses risk failure by simply running out of cash as 48% admit they overestimated their sales and 65% underestimated costs.
Significantly 46% of sole traders stated they did not have a website in their first year of trading although 60% - the joint highest figure with the North East - of these London businesses believed it would help increase sales. Surprisingly, 78% of these businesses still do not have a website to market themselves. Additionally 35% of businesses with a turnover of less than £100K did not have a business plan, 63% had no formal accountancy relationship and 80% had no legal support. Most worrying is the fact that 32% of those surveyed stated they did not have these tools because they did not know where to start in setting these up.
Star of Star of Dragons’ Den and Ryman Stationery Chairman Theo Paphitis said: “At a time when we need businesses to thrive, too many good businesses risk failure because they struggle to manage the basics early on. Many small businesses lack the time and money to get essentials such as business plans, accountants or websites in place – getting them all in one place would free them up to concentrate on what they’re good at and growing their business.“
Smarta Business Builder provides accounting software, business planning tools and templates, a website builder to create fully-functional e-commerce websites, bespoke legal documents, personalised and professional email and a 24hour legal helpline. All services are accessed from a single log in at a cost starting from £20 a month. Visit smarta.com to find out more.
Peter Ibbetson, Chairman small business, NatWest, said: “This research shows that many businesses in the UK are at a disadvantage because they are operating without an accountant, legal support or business plan in their first year. Alarmingly one of the key reasons given for this is because they do not know where to start. We are very much committed to supporting start-ups and business growth and Smarta Business Builder will prove to be an important tool in our locker.”
*Source: Office of National Statistics – December 2010.
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