The BPPG warns Entrepreneurs to take advice from the experts to help break down the barriers to enterprise
The Better Payment Practice Group (BPPG) is reminding budding entrepreneurs during Enterprise Week (14th-20th November 2005) that priority must be given to good credit management practices to ensure that a new business is successful. The advice follows a survey by the Group, which found that over a third of owner/managers felt credit management problems were the biggest barriers to starting and growing a business

The poll, which was held on this website, asked businesses what issues they consider to be the main difficulties when starting up and growing a business and split respondents into owner/managers and employees. The BPPG has found that 35% of owner/managers consider the main difficulty in starting up and growing a business to be credit management problems, while 19% consider access to finance to be the main barrier. Conversely, those who are not owner/managers thought access to finance was the biggest barrier with 27% giving that reason – this finding corresponds with research by Enterprise Insight* which found that young people consider access to finance to be the main barrier with over half stating that was stopping them from taking a new business idea or venture forward. In the employee responses, credit management problems came second, with 19% stating that they were a barrier.

In total, 31% of all 227 respondents confirmed that credit management problems were detrimental to business success, followed by access to finance (23%), knowing how to get started (14%), finding ongoing business support (12%) and lacking relevant skills (11%).

Richard Wilson, Chairman of the BPPG, and representative of the Institute of Directors, commented: “Although business owner/managers know from experience the restrictions that cash flow problems can place on a new or growing business, the survey highlights that employees and budding entrepreneurs do not realise the importance of credit management. When considering taking a new business idea forward, entrepreneurs must ensure that good credit management practices are in place to help reduce the risk of business failure as a result of late payment or bad debt and help protect cash flow. We hope that entrepreneurs will take the advice from those already in business to take action in the early stages of business life to avoid problems in the future.”

Wilson continues: “The findings demonstrate the importance of a longer term vision and listening to the advice of experienced business owners and managers. The BPPG suggests that those considering a new business venture enforce the essential techniques in credit management to minimise their exposure to slow payers and bad debts.”

For free advice and information on credit management for new business start ups, click here.

For information on Enterprise Week and the Enterprise Insight campaign visit: www.starttalkingideas.org/enterpriseweek

* The Enterprise Campaign Tracker, Enterprise Insight, 2005

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