Financial mistakes can take businesses to their doom if not mitigated immediately and effectively. If you are a small business owner in Orrington, it’s important that you learn about the most common financial mistakes businesses in your area make so you can spot them early on and fix them before it’s too late.

What is a small business?

Small businesses are sole proprietorships, partnerships, or corporations that are smaller in scale and have a smaller number of employees than regular-sized businesses. The term “small” makes it so that these types of businesses are eligible to apply for government support.

Different regions offer different definitions for the term small business. So, in the UK, a small business is a privately owned organisation that houses less than 50 employees and has a less annual turnover of under €10 million. These types of businesses require less capital, have less or no machinery, and have an annual balance sheet total equal to or less than € 10 million.

How many businesses are there in the world?  

Small businesses are available all throughout the world. Approximately there are around 400 million small businesses worldwide. Also, among these, over 65% will be profitable in the year 2022. Moreover, on a global scale, small businesses make up over 90% of all companies, and they account for 50% of jobs.

In the UK alone, there were roughly 6 million small businesses at the start of 2022. Furthermore, this is 99.2% of the total businesses out there. Also, small businesses account for 60% of the employment and about half of turnover in the UK private sector.

What do financial pitfalls mean? 

50% of small businesses tend to fail and cease in the first five years. The main factor for this is the financial mistakes businesses make. Most of them manifest as a result of poor financial practices, lack of knowledge in accounting and law and sometimes even ignorance. So, here are some of the most common small business pitfalls that you want to avoid.

  • Bad cash flow management

Avoid bad cash flow management and make sure that there is more money flowing into the business than out of it.

  • Mistakes on taxes

Tax mistakes can be very costly and might even force an audit on you. So, make sure to do your taxes accurately and on time.

  • Not hiring a professional

Handling accounting, taxes, payroll, and cash flow on your own can be tricky for anyone. So, to avoid this, get the help of professionals who can do it right on the first go.

  • Ignoring business insurance

Business insurance can aid owners in mitigating any costly unforeseen events.

Why you should contact Philip Nolan to avoid financial pitfalls?

To ensure the longevity and profitability of your business, you must avoid financial mistakes as much as you can. Although the business landscape can be unpredictable, if you have the right team by your side, you will be able to predict them early on and navigate them in the smartest way. 

We at Philip Nolan are a trusted accounting firm with a team of experienced accountants who can help you avoid these financial pitfalls to drive your business towards success. Also, with the help of our professional accountants, you can easily manage your cash flow, taxes, payroll, and accounts accurately. Let’s have a chat and see how we can help you improve your business. 

get a quote now