The “can-do” attitude that makes many entrepreneurs so successful, could also be their Achilles’ heel, according to a new survey released by Hiscox, an international specialist insurer.
Research found that despite 64 percent of small business owners who felt legal issues should be handled by professionals, only 26 percent actually employ full or part-time legal and/or accounting help.
Passion drives entrepreneurs and pressure is part of the package. 36 percent of those surveyed reported that their passion gets them through tough times, while 40 percent believe pressure is what they signed up for. However, passion could be clouding entrepreneurs’ perceptions of when they need to employ outside help for specific tasks.
According to the data, a full 76 percent of small business owners say that either their skills gap is not a threat or that they are able to plug the gap with professional expertise when needed.
“Entrepreneurs truly have to be a ‘jack of all trades;’ yet a clear skills gap exists between their limited knowledge in certain areas and what they are actually willing to invest in,” said Kevin Kerridge, small business insurance expert at Hiscox. “It is important that small business owners recognize where professional expertise is imperative. Hiring or contracting support for technical sides of running a business can save them money in the long run.”
Knowledge gaps pose problems
Small business owners admit that they lack knowledge in key areas, including legal (56 percent), taxes (36 percent), IT (34 percent) and insurance (31 percent).
Despite the potential hazards of legal and financial errors, more business owners employ a full-time communications officer than an accountant or in-house legal counsel (8 percent and 5 percent, respectively). Only 7 percent of small business owners would opt for an accountant and/or lawyer if they could make another full-time hire.
The research also found that business owners regularly handle most office tasks themselves, all the way down to cleaning the office and making deliveries:
- Ordering supplies: 83 percent
- Filing: 80 percent
- Paying invoices: 76 percent
- Preparing invoices: 74 percent
- Printing/binding documents: 72 percent
- Opening the business in the morning: 64 percent
- Closing up at night: 61 percent
- Cleaning the office space: 63 percent
- Reception duties 50 percent
- Customer deliveries 54 percent
“While it’s in the DNA of an entrepreneur to just get things done, they can open themselves up to potential risks that can lead to business interruption, or even litigation if they try to handle key areas like legal, taxes and insurance themselves. This has the potential to unnecessarily cause a damaging domino effect on their business that could shut its doors permanently,” Kerridge warns.
Source: Hiscox Small Business Insurance
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