According to a study by Clydesdale Bank, rated Scotland's best business bank*, the dreams of personal and financial freedom most aspiring entrepreneurs hope for often disappear when the reality of running a business sets in.
Clydesdale Bank found that more than half (51%) of sole traders and small business owners first decided to set up their own business because of a desire for more flexible working and an improved work/life balance. A further two in five (41%) did so for greater financial control.
However, more than a third (37%) of small business owners who set up in business because they wanted to be their own boss admitted they miss the comfort of having a sounding board when making business decisions. The study was conducted by Clydesdale Bank's small business specialists as part of continual enhancements to its integrated personal and small business banking services which are accessible through high street branches.
Steve Reid, Clydesdale Bank's Director of Retail Banking said: "The prospect of running your own business - free from the usual gripes and office politics - is very appealing to many people and the idea of being in control of your financial future and having more personal time only adds to the attraction. But, it can be very lonely at the top if you can't access trustworthy, experienced advisors.
"We can't all be experts in every aspect of running a business - so specific issues can benefit from specialist advice. And as our research shows, just when your business is really flying you can find yourself with little time to look after your often increasingly complicated personal finances too. So it's important we're able to offer solutions based on a full picture of the business owners' finances. This is why our integrated banking service dedicated to small business owners has proved such a success."
Knowing where advice can be accessed is crucial to small businesses, however more than one in three (37%) felt that banks do not cater well for smaller businesses and are only interested in helping large companies.
Steve Reid said: "It's worrying that smaller businesses don't know where they can turn to for business advice and feel that banks don't cater for their needs. This is particularly concerning when you consider that our research shows 43% of people set up their own business in a field that is alien to their experience and that only 18% of those people running their own business have any managerial experience at all.
"Through our network of Clydesdale Bank branches, we offer an integrated high street small business banking service. It's essentially a one-stop shop aimed at smaller businesses typically with a turnover up to £1m, and offers a wide range of help and advice from cashflow finance and pensions, to mortgages and advice on funding business expansion.
"For people running smaller businesses, knowing that help and advice is readily available on the high street is half the battle and together with our branch-based business managers, we can help smaller businesses move on to the next level. As an added benefit to our customers, we have also linked with the Forum of Private Business to offer discounted membership where customers can access further specialist business help and advice."
Other findings from Clydesdale Bank's research include:
71% of respondents say their biggest worry is managing cashflow
14% have sleepless nights worrying about compliance with EU legislation
55% waste time in chasing late payments from customers
47% find it difficult to find the time to market themselves
45% would like more opportunity to network with customers and suppliers
Toptips for small business
To help small businesses remain on the track to success, Clydesdale Bank is offering these top tips to small business owners:
Understand the law - Make sure you are fully aware of any legislation that may affect your business. This does not just mean being clued up when you start your business, you must keep abreast of any changes in legislation that may occur.
Identify the best finance options - Make sure you weigh up all your options and consult the experts before making your decision
Take advice - Seek as much advice, guidance and support as you can get your hands on. One of the benefits of running your own business is that you can do things your way, but make sure you use the advice of people you can trust.
Maintain a good work-life balance - It can be easy to get tied down to working all hours of the day to try to get the best out of your business, but maintaining a work-life balance is essential in the long term.
Be flexible - Owning a small business may mean that you have to take on a variety of different roles you may not be used to. Take this opportunity to be creative and expand your skills.