Small business owners and startups are not interested in seeking outside advice when it comes to managing their finances, according to new analysis from KPMG Small Business Accounting.
The conclusion was reached through a survey, the results of which were released Thursday (Dec. 3). KPMG spoke with 1,000 small business owners and found that the majority are not consulting with a financial professional.
In fact, not a single startup founder reported consulting with such an advisor, KPMG found.
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More than two-thirds (69 percent), the research found, are entirely self-taught on their financial management; 63 percent prepare their own accounts.
That’s despite a quarter of entrepreneurs admitting they have no idea how much they could safely invest in their business, and nearly one-third of startup owners acknowledging that they are concerned about financial uncertainty.
A significant number of survey respondents revealed a tendency to make financial decisions, like hiring and firing, based on gut instinct. Major decisions, the research found, are made on quick, off-the-cuff calculations of current numbers available. KPMG also found that many small business owners make a business decision simply by looking at how much money they have in their bank account at that moment in time.
“Many startup owner managers have fought hard for the financial skills they need to be successful,” said KPMG Small Business Accounting Head Bivek Sharma. “But too many are lacking the data and insights to help them make truly informed decisions.”
He added that it is key for these business owners to not only look at current cash flow status but also gain insight into future flows and forecast growth.