By Jeremy Morris, Associate Editor, US Daily Review. Source: Hiscox.
The ‘can do’ attitude that entrepreneurs need to survive and thrive could also be their Achilles heel, according to new research released today by specialist insurer Hiscox. The research found that despite 71% saying that legal and 43% saying that accounting issues should be handled by a professional, only 30% of small business owners actually employ full and/or part time help in these areas of expertise.
When asked which area of running a business they lacked the most knowledge of, over half of respondents said legal (52%) followed by taxes (42%), IT (22%), insurance (19%) and sales and marketing (23%). But over three quarters (77%) do not believe this to be a threat to their business, and 36% are determined to find a way through any problems themselves.
Over a third (35%) of small business owners say their passion for their idea gets them through the pressures of day-to-day management of their business and 48% believe pressure is what they signed up for when they started out.
“We know that entrepreneurs are committed to giving their businesses nothing less than a hundred per cent and they are often stretched to become a ‘jack of all trades’. Our research shows there could be a skills gap between what they admit they lack knowledge of, and what they are willing to invest in,” said Deepak Soni, small business insurance expert at Hiscox. “There comes a point when small business owners need to trust other experts to help them with the more complex and technical issues associated with running a business.”
Despite the potential hazards of legal and financial errors, more business owners employ an office manager than an accountant and/or in-house legal counsel (19% vs. 5%). Although, if they could employ another person, 18% believe that the professional assistance that would be most valuable to their business would be an accountant/lawyer.
The research also found that business owners handle the majority of office tasks including:
- Ordering supplies – 80%
- Filing – 77%
- Paying invoices – 71%
- Preparing invoices – 70%
- Printing/ binding documents – 70%
- Opening the business in the morning – 67%
- Closing up at night – 66%
- Cleaning the office space – 58%
- Reception duties – 54%
- Customer deliveries – 49%
Deepak Soni adds: “It is important for entrepreneurs to recognise when they need to seek out expert advice and support so they aren’t opening themselves up to business critical risks. For example, a badly worded supplier contract could lead to disputes down the line that could end up breaking the bank or the relationship.”
For more information about Hiscox business insurance, visit: http://www.hiscox.co.uk/business-insurance/
Notes to editors
The Survey Shop interviewed a sample of 600 respondents, 300 from the UK and 300 from the US, drawn at random from online panels of small businesses with fewer than ten employees between 14 and 17th May 2012. The respondents were qualified as owners, partners and directors. The research has statistical accuracy of +/- 2% to +/- 4% for the whole sample at 95% confidence.
According to a statement, “Hiscox, headquartered in Bermuda, is an international specialist insurance group listed on the London Stock Exchange (LSE:HSX). There are three main underwriting parts of the Group – Hiscox London Market, Hiscox UK and Europe and Hiscox International. Hiscox London Market underwrites mainly internationally traded business in the London Market – generally large or complex business which needs to be shared with other insurers or needs the international licences of Lloyd’s. Hiscox UK and Hiscox Europe offer a range of specialist insurance for professionals and business customers, as well as high net worth individuals. Hiscox International includes operations in Bermuda, Guernsey and USA.”