Small businesses in the UK are losing thousands of pounds annually due to a lack of time to manage their expenses effectively. According to a study conducted by researchers who polled 500 SME owners and decision-makers, small businesses are losing nearly £350 each month on average because they lack the time to review their spending. This amounts to an approximate total of £4,000 per year.
The research also revealed that a significant number of small business owners, 68 per cent, have not updated their approach to managing expenses in a considerable amount of time. However, there is a willingness among the majority (89 per cent) to adopt new strategies, with 57 per cent already turning to technology to enhance their financial management and boost productivity.
When it comes to keeping track of running costs, the study found that over one in four (26 per cent) SME owners struggle to thoroughly review their energy bills due to time constraints. Additionally, 20 per cent wish they had more time to focus on software and technology. An issue highlighted was the ‘forget-to-cancel’ culture, where automatic renewals of subscriptions due to time constraints contribute to increased expenses for 24 per cent of small business owners.
The research was commissioned by Smart Energy GB, who partnered with Nisha Katona MBE, founder of Mowgli Street Food, to offer small business owners a free resource called The Accuracy P.L.A.N. to help navigate through business expenditure. Nisha emphasised the importance of monitoring energy usage for cost savings and efficiency in operations.
Energy bills emerged as the top concern for business owners, with 43 per cent identifying them as a major worry. Despite this, 22 per cent admitted it had been over a year since they reviewed their business energy supplier. Nearly a third (31 per cent) believe they could reduce energy costs if they had more time to dedicate to reviewing them. Other areas where savings could be made include insurance premiums (23 per cent) and broadband costs (20 per cent).
Small business owners are encouraged to implement strategies such as monthly expense reviews and comparing supplier costs to better manage finances. The study found that managing finances can take a toll on small business owners, with 41 per cent reporting an average of five or more sleepless nights per month. Simple processes, like regular expense reviews and energy-saving habits, were suggested to alleviate these challenges.
As Managing Director at Smart Energy GB, Victoria Bacon highlighted the potential for smart meters to assist small business owners in saving time and money by providing accurate energy data. The installation of smart meters can help identify opportunities for cost savings and give owners more control over their energy spend.
Efforts to educate teams on energy-saving practices, invest in energy-efficient equipment, and set clear financial goals were recommended by Nisha Katona to help small business owners navigate financial challenges successfully. By adopting these strategies, small businesses can overcome the financial burden caused by time constraints and enhance operational efficiency.