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THE COST OF SMALL BUSINESS OWNERS ‘ DOING IT ALL ’
New research from Xero , a global small business platform , has found leaders of the UK ’ s smallest businesses ( one to nine employees ) and sole traders spend less than half ( 46 %) of the working week on their core jobs . These businesses effectively aren ’ t starting work on primary responsibilities until 2.36pm on Wednesday because they ’ re juggling non-core roles like IT , legal , admin , finance and cleaning . As a result , these businesses reported missing out on an average of £ 61,000 in additional revenue . That ’ s equivalent to 12.5 % of income each year .
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LOSING HALF OF THEIR WORKING WEEK JUGGLING SO MANY SUPPORT ROLES IS NOT ONLY COSTING THEM REVENUE BUT COSTING OUR ECONOMY MUCH NEEDED JOBS AND PRODUCTIVITY GAINS .
HE SURVEY OF 1,000 small-
T and medium-sized business leaders found that almost half ( 46 %) of the smallest businesses have experienced burnout and stress because they are taking on too many roles at work . On top of this , almost one-third ( 32 %) say they can ’ t take on new staff or grow their business because they are too distracted by operational duties .
Kate Hayward , UK Country Manager , Xero , said : “ The smallest firms are missing out on so much . Losing half of their working week juggling so many support roles is not only costing them revenue but costing our economy much needed jobs and productivity gains . We need to stop grouping all SMEs together and give the smallest businesses more tailored support to free up more time for them to focus on growth .”
Not all SMEs are the same
These challenges are not restricted to the smallest businesses – medium and large SMEs ( 50 – 250 employees ) also experience similar time pressures . But they have the resources to employ people across non-core business functions .
For example , 93 % of medium and large SMEs employ a finance or accounting specialist , but just 37 % of the smallest businesses have invested in one . This gap in resources is costing the smallest and sole trader businesses twice the productivity gains of larger SMEs – 12.5 % extra turnover annually compared to 6.39 %.
The smallest firms want to be heard
As well as having more resources to hire dedicated staff , larger SMEs also feel much better understood and supported by governments , industry and professional bodies .
Almost half ( 44 %) of the smallest businesses and sole traders say it ’ s difficult getting the right advice and support for a business of their size . And only 42 % feel their industry , trade or professional body understands the pressure on them , compared to 74 % for larger SME firms .
This isn ’ t just constrained to industry , trade or professional bodies though : only 20 % of the smallest businesses and sole traders believe governments and policymakers understand them , and only 33 % feel tech firms do , compared to 54 % and 69 % respectively for larger firms .
Hayward added : “ This is what we call the ‘ SME fallacy ’; the damaging assumption that all ‘ SMEs ’ are the same , have the same challenges and require the same support .”
It ’ s widening the digital divide too
The research also reveals a slower adoption of technology among the smallest firms and sole traders : just 58 % use finance and accounting software , compared with 84 % in medium and large SMEs . But when these small firms are using technology , they are finding it effective ; 85 % who use finance software , 84 % who use sales and marketing software and 80 % who use HR platforms .
18 Intelligent SME . tech