UK startups and microbusinesses are wasting over two working weeks every year on admin tasks, including managing mobile phone contracts, choosing energy providers, and buying insurance – according to new research.
The study, conducted by Beasy, which surveyed 500 business owners employing between 1-9 people, found that startup founders are spending an average of 5.5 hours per week choosing and managing the business services they need to run their company – equating to a staggering £7,106 in lost revenue per business, and costing the UK an estimated £37bn in GDP.
At the heart of the issue is business owners’ reliance on manual processes. According to the study, over a quarter of business owners (26%) still use a pen and paper to keep a record of critical business functions including finance, marketing, insurance, and utilities, while more than two thirds (68%) use spreadsheets. Despite the advancements of cloud technology solutions, it’s clear the majority of UK startups and microbusinesses are relying on outdated methods to run their operations, slowing down growth.
Beasy Co-Founder, Arif Miah, said: “Our research highlights a fundamental barrier which is stunting the progress of the UK’s most ambitious founders, and the growth of their startups and businesses: the process of how businesses choose, buy and manage their business essentials. In an increasingly competitive business world, founders want to be strategising and innovating in order to stay ahead, not getting bogged down in unnecessary admin.”
While the majority of startups and microbusinesses (88%) rely on business services like business banking, mobile phone contracts and communications tools to run their operations, not all can afford to subscribe to these services. Of those who don’t use these services, nearly half (44%) say this is because they consider them “too expensive” and “a luxury” at their current stage of growth. Of those who do use these services, 50% of business owners think they pay too much for their energy, insurance and other services. More than a third of startup business owners don’t trust providers to have their best interests at heart when it comes to price and service level, and one in five (20%) say they don’t get value for money.
Beyond price, the other key barrier for business owners making the most of business services on offer is, for over a third (37%), not having the time or not knowing where to start with such a time-consuming process. A third of startups are simply Googling for the best option when it comes to choosing their services, and as a result, more than a quarter (27%) say the biggest challenge running their business is getting the wrong business tools and services.
“Startup admin needs to be simplified, the route into business needs to be accessible for all, and anyone from any backgrounds who wants to start and grow a business should be empowered to do it, starting with simplifying the process of getting the services a founder needs at an affordable price”, continued Arif’s co-founder, Ala Uddin. “Getting this right will unlock one of Britain’s most valuable assets – the ingenuity and determination of its people to innovate in the face of adversity – which will drive the next generation of innovative startups.”
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Tags: banking, business, communications, research, startups