Cash flow management essential for start-ups says ICAEW
The Institute of Chartered Accountants in England and Wales (ICAEW) says that start-ups should be more frugal and avoid "burning through resources too quickly" by using more careful cash flow management.
The professional body has pointed out that many entrepreneurs who are starting a new business find the reality very different to what they had in mind.
The ICAEW asked entrepreneurs about how the actual experience of being in business differed from their expectations, and a third said that failing to agree on a common vision was the mistake they most regretted.
One in five cited a failure to manage cash flow well, and 15% wished that they had sought out business advice sooner.
Not getting enough customers was the biggest worry for 28% of those starting out in business, and 75% said that the whole project was more difficult than they had thought it would be.
ICAEW director of business, Stephen Ibbotson, said: "The desire to create a successful start-up in the UK is still very high and continues to grow. Entrepreneurs' perceptions of what they think will be the challenges they face as a start-up and the reality they actually encounter are very different."
"These false assumptions can often lead to businesses not fulfilling their maximum potential and at worse, failing completely," he added.
However, the ICAEW study also found that 40% of entrepreneurs said that when they started a business, they hadn't experienced any challenges that had been a total surprise to them.