New AAT research has looked into the problems small and medium enterprise (SME) owners face when starting out. Findings include that 20% of SME owners found not having finance knowledge was the biggest struggle when they first started out, 12% of owners struggled with marketing knowledge, and 11% struggled with legal knowledge. In all, two thirds of owners (65%) said there was at least one business area they struggled with at first.
Despite more business owners saying that they struggled with a lack of financial knowledge, only 11% said they wish they had spent more time on finance at first when starting out, compared to 19% who said they would have spent more time on marketing to help generate leads for their business. 8% said they would have spent more time on IT, and 5% on PR and social media.
Owners consult accountants and internet search engines
The lack of knowledge in certain areas could be put down to owners not doing their research. One in four SME owners AAT surveyed (26%) said they launched their business after less than a month researching how to do so or looking into the market at the time, and only 29% spent more than six months doing research.
When considering how they run their businesses,
- 19% of owners said they turn to an internet search engine when they need support and information
- 22% would go to an accountant
- 11% try looking on a business website
- 10% go to business networks
- 8% to trade bodies such as the Federation of Small Businesses
- 7% consult family and friends.
Business owners show confidence
AAT also asked owners how confident they were in being able to do certain steps of setting up their business before they started out. Despite many not doing much research before starting out, most owners showed a large amount of confidence in their abilities, perhaps showing how confidence is necessary to become a successful entrepreneur.
- 81% were confident they understood the market and their competitors
- 75% were confident about budgeting for the future
- 70% were confident about writing their business plan
- 69% were confident about setting out their terms and conditions of trade
- 68% were confident about putting together financial projections
- Despite owners being confident in their business ideas and their abilities, only 50% were confident about identifying and securing business loans, showing the difficulty small businesses can face to get funding when first starting out.
The survey of business owners with between 1-249 employees also found that:
- Over a quarter of SME owners (27%) took longer than a year to feel confident in running their own business.
- 17% felt fully confident from the moment they came up with their business idea
- 15% felt fully confident once their business had actually been set up.
- One in twenty owners (4%) say they still don’t feel fully confident in running their business.
Commenting on the research findings, Rob Alder, Head of Business Development at AAT, said:
“Starting your own business can be a daunting process. This research shows that many people who want to run their own business may need more help when they’re starting out. If you have a business idea, it’s essential you do as much research as possible to ensure your idea has the best chance to succeed. Being confident in yourself and your idea is excellent, but you should still ensure you get as much advice as you can, from multiple sources.”
For more help on how to start a business, please visit the Informi website.