Starting a new business can be daunting, and there are a number of considerations that you will be taking into account if you decide to take the leap to start a new business.
You may be worried about winning enough work or not earning enough to support your family. You may even be concerned that you lack the experience to start your own business, or that you don't have the right connections and contacts.
Very little new start-ups realise that one of the biggest issues small businesses face can, in fact, be late payments.
Studies show that almost 50,000 small businesses fail every year due to late payments, and it is usually the smaller companies and self-employed who suffer most.
With businesses chasing more than £50 billion worth of invoices, according to a recent survey, UK SMEs are struggling due to late payments.
Not only does this lead to cash flow issues, but it also wastes a significant amount of time, with the average small business spending 1.5 hours per day following up late invoices.
The government has previously tried to address the issue, and last year the government announced that large businesses would be required to review and report on payment practices as part of efforts to tackle late payments.
However, even with the government's efforts, late payments are still a huge problem for small businesses and can determine the success of a business. Late payments are the biggest factor contributing to the failure of small businesses due to the effects on cash flow.
Although the government has agreed to clamp down on late payments and increase the power of the small business commissioner, there are a number of things you can do as a small business owner to prevent late payments crippling your cash flow.
If you would like more information, or require assistance to recover debts, please get in touch with a member of our debt recovery service team.
About 50,000 small businesses go under every year because of late payments and it is the very smallest companies and the self-employed who bear the brunt.