Micro Businesses Fail to Stay on Top of Finances
More than half of UK micro enterprises are not regularly monitoring their finances and 8% do not know what ‘profit margin’ is
The majority of the UK’s micro businesses fail to stay on top of their finances, with 59% of business owners only checking their company’s financial position monthly; 10% doing so annually and 5% admitting to never doing so.
The research, conducted by YouGov on behalf of FreeAgent, revealed that only 38% of micro enterprises check their financial position effectively – doing so once a week.
The study also found that 17% of micro business owners do not have immediate access to essential financial information such as cashflow, tax, invoice and overhead costs.
Furthermore the research, which surveyed over 500 micro firms, revealed that 25% of respondents were unaware of their business’ current profit margin with an additional 8% confessing that they did not actually know what a ‘profit margin’ is.
CEO and co-founder of FreeAgent, Ed Molyneux, commented:
“Our research shows that many small business owners don’t have all of the important information about their business’s finances readily available to them and they don’t check their overall position as often as they need to – while many are also unaware of what their profit margin is.
“That means they’re not well-equipped to make the changes that would enable their business to perform even better.”