Getting through admin is akin to having teeth pulled for many business owners, and it’s not just painful but a huge waste of time for entrepreneurs. The majority spend far more time on everything from pensions to health and safety issues than they'd like - particularly when it detracts from getting on with developing the business.
A new study from the Federation of Small Businesses has found that small firms spend four days a month trying to battle the burden of red tape. Of the 1,685 small business owners surveyed, 55% said their company’s growth was being hindered by the time spent on business administration.
But which admin tasks proved particularly troublesome for the nation’s entrepreneurs?
1. Accounting duties e.g. paying suppliers - 14 hours 45 minutes per month
2. Business banking – 9 hours 19 minutes per month
3. Tax – 6 hours 38 minutes per month
4. HR issues – 5 hours 14 minutes
5. Health and safety – 5 hours 6 minutes
Then of course, there’s the high cost of outsourcing. Firms often opt to outsource to try and cut down on the amount of time they waste poring over paperwork which may as well be written in hieroglyphics. But it’s not cheap finding outside help to number crunch.
The average annual amount spent by small firms outsourcing business admin tasks came to nearly £14,000 – and FSB members spend an average of £3,600 on help with tax compliance. If you're not spending considerable time on admin duties, the likelihood is you'll be spending a decent chunk of money on it instead. Not a particularly appealing scenario either way.
The government may have pledged to remove £10bn worth of red tape over the course of this parliament (though it can't be blamed for the complexity of business banking), but it's evident many entrepreneurs would like changes sooner rather than later to prevent them getting too tied up in the turmoil of red tape.