Financial Worries Stop 25% of UK Businesses from Hiring New Staff
Financial Worries Stop 25% of UK Businesses from Hiring New StaffKashflow

The UK economic recovery may be more fragile than first thought after a new survey showed that a quarter of businesses are still reluctant to hire new staff because it might complicate the payroll.

Furthermore, the new research released by KashFlow, shows that one in every four business owners are being kept awake by financial concerns.

"After years of running businesses in a challenging environment, owners are generally positive about the future and prospects for growth," said Andrew Bodkin, managing partner at accountants Haines Watts, which responded to the findings.

"However, this doesn't mean that it's plain sailing for SMEs. Many face a host of challenges which threaten sustainable growth. Accessing new customers, getting the right employees on board and managing cash flow, crop up time and time again as the issues that concern owners the most.

"Owners are so focused on the day-to-day running of their businesses that they don't often have time to plan future strategy yet it is fundamental to achieving sustainable growth. Haines Watts is increasingly supporting owners through this process and helping SMEs ensure they are building better businesses fit for the future."

The KashFlow study surveyed 500 small businesses are also worried about expanding as they are finding it increasingly difficult to keep track of their company's money.

In addition, businesses are said to feel hampered by bureaucracy and inefficient accounting processes.

"Recent pledges by the government to support growing small businesses are simply not working. Small businesses should be the growth engine of the UK economy, yet simple accounting processes using traditional paper-based accounting systems are leaving business owners unable to account for their finances and unable to focus on their business," said John Coldicutt, Head of KashFlow.

"Business owners need to be supported so they can run their company effectively and profitably. Key to this is businesses and accountants working collaboratively so both have the same access to up-to-date accounts. This will enable the accountant to act as a trusted adviser and add real value to the business. Meanwhile the business owner can focus on what they do best – growing their business."

Case Study

Sarah Pettegree, founder of Bray's Cottage Pork Pies
Sarah Pettegree, founder of Bray's Cottage Pork PiesKashflow

Sarah Pettegree, founder of Bray's Cottage Pork Pies, has first hand experience of many disturbed nights worrying about the cash in her business.

"Knowing where the business finance is and keeping an eye on the cash flow has sometimes led to sleepless nights, especially in the early days. It was incredibly difficult not to worry because we didn't have a buffer in the business for any unforeseen expenditure," said Pettegree.

"By using decent accounting software we managed to keep a tight financial ship, but I still have to be careful now; we are a fairly seasonal business and right in the middle of stepping up production, so the costs of our raw materials increase before the revenue is generated.

"It's only by using the right technology tools, having experience of running the business and disciplining myself not to worry at night that Bray's Cottage is where it is today."