Small Businesses Fail to Seek Expert Advice
Small and medium-sized firms uncertain about legal requirements when employing staff yet majority shun expert advisers for family and friends
Small and medium-sized enterprises continue to seek business advice from family and friends over experts, despite the majority feeling unable to overcome obstacles due to a lack of knowledge.
According to research by insurance group Aviva, the top three areas small businesses continue to struggle with are financial bookkeeping (32%), marketing and sales (31%), and understanding employer legal obligations (30%).
However the survey– which featured 1,507 small and medium enterprises – found that entrepreneurs continue to look to family and friends instead of experts for these business issues. 38% choose to rely on family or friends and friends, compared to just 13% of business owners who choose to consult g a financial advisor, legal advisor (9%) and insurance provider (6%).
The findings suggest that small businesses could be risking penalties, especially in regards to fulfilling employer obligations like auto-enrolment and liability insurance.
The report revealed that 25% of respondents didn’t know that employers’ liability insurance is legally required once they have one employee. In addition,87% did not know that the minimum legal requirement for employers’ liability insurance is £5m.
Ambiguity also remains in regards to auto-enrolment, with 11% of businesses admitting to not knowing it was a legal requirement.
Angus Eaton, managing director of commercial lines at Aviva, commented:
“Making the time to balance the management of day to day customer, employee and supplier demands with protection against nasty surprises is a perpetual challenge for any business. Great advice helps.
“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, learnt from similar experiences in other businesses.”
For more information on small business legal requirements and insurance, take a look at Startups.co.uk’s channel here.