We’ve switched our classes to live online. For more Covid-19 updates, click here

Bad advice cost UK businesses £6.4bn this year, shows study

Bad advice cost UK businesses £6.4bn this year, shows study

In excess of 320,000 British businesses have lost a total of £6.4bn in the last year due to receiving poor advice, says a new report.

Research conducted by Direct Line for Business revealed that the average SME loses more than £20,000 a year.

Staff layoffs

The figures don't just reflect accounting procedures, but can also have very real effects, as 46% of companies who reported a loss said they had to lay off staff as a consequence.

Whilst 20% of micro businesses claimed to have lost between £50,000 and £100,000, 30% of all those surveyed said they had scaled back plans for expansion.

Head of Direct Line for Business Nick Breton said: "Our research clearly highlights the devastating effect poor professional advice can have on small and micro businesses. However, the impact on an advisory firm that is facing litigation can be just as shattering. For those providing advisory services, it is important to recognise that issues can occur and clients could pursue them for compensation."

Serious issues

With more than a quarter of businesses who took part in the survey reporting that the survival of their business was at stake through the losses, four in ten identified IT consultants as the source of their bad advice problems.

A third of companies blamed the poor advice they had been given on management issues, and a further third claimed that incompetent marketing consults had damaged their business.


Other News

How strategic business planning can help you through 2020?

Every business operates with the goal of growth, but only a few manage to beat the competition at every curve.…

5 Benefits of Studying a miniMBA

Gaining a managerial role is a dream come true for many, but senior positions require serious upskilling. While pursuing a…

How to Turn Your COVID-19 Solution into a Viable Business

Despite the hardships faced by many businesses during the COVID-19 pandemic, there has never been any shortage of innovative entrepreneurs.…

Back to top