B2B Payments

Entrepreneurs Know What’s Holding Them Back – And What They Need To Succeed

A lack of access to capital. The red tape of regulation. The burden of administrative tasks. These are all common reasons why a small business owner may struggle to grow their company, and the latest analysis on the topic certainly points to these factors as having an impact on SMB growth across the world.

But the most recent research suggests entrepreneurs are also clear about what is helping them grow, and what they are looking for in terms of technology, professional support and beyond.

This week’s B2B Data Digest dives into the numbers behind the struggle of small businesses to expand – and entrepreneurs’ clear vision for what supports their success.

9 in 10 SMBs say cash flow challenges hamper business growth, according to data from Scottish Pacific. Researchers for the SME Growth Index surveyed Australian SMBs and found more than one-fifth could not take on new work because of cash flow problems. More than 90 percent said this challenge prevents revenue growth. But among the entrepreneurs with plans to expand, about a quarter said they will do so by seeking financing from their main financial service provider.

80 percent of Chinese small businesses earn more than 10 percent of revenue from online sales, found CPA Australia for its Asia-Pacific Small Business Survey. The report highlights mainland China SMBs’ use of technology to grow, with 78 percent of Chinese entrepreneurs expecting their firms to grow this year. Even more – 97.5 percent – believe their local economy will at least remain strong or improve in 2018. FinTech in particular is an increasingly important part of Chinese business growth, with 84 percent of SMBs reporting that 10 percent of sales come through digital payments tools like Alipay and WeChat.

69 percent of U.K. angel investors target their home region, and small businesses surveyed by the UK Business Angels Association (UKBAA) suggests most investment is targeted in London. Entrepreneurs in other regions of the U.K. feel left out, the report found, with 20 percent reporting they tend to receive advice geared toward a London-based small business. UKBAA chief executive Jenny Tooth said a lack of infrastructure to connect angel investors to entrepreneurs outside of London is key to supporting these companies.

24 percent of Aussie SMBs use traditional banks for funding, down from 38 percent in 2014, Scottish Pacific’s report found. The data suggests entrepreneurs are taking the leap to FinTechs, with more than a fifth of SMBs surveyed saying non-bank lenders are their preferred choice for financing, up from 11 percent in 2014. According to analysts, the shift is likely part of entrepreneurs’ broadened knowledge of alternative finance, coupled with their demand for access to capital without having to use property as collateral.

20 percent of U.K. entrepreneurs believe the small business commissioner will make a positive impact, found Close Brothers Invoice Finance in a new report. The survey suggests small businesses are largely skeptical of the commissioner’s effectiveness in combating late payments – 41.8 percent said they don’t believe the commissioner, a newly-appointed government position, will have a positive impact or strengthen their ability to compete and succeed.

15 percent of U.K. SMBs say legislation and regulation is their top barrier to growth, compared to just 5 percent that say access to capital is their largest hurdle. Political uncertainty was also cited by 15 percent of SMBs surveyed by BDRC for the Business Finance Taskforce’s SME Finance Monitor, reports said, while the current economic climate was cited by 14 percent as their top barrier.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The PYMNTS Next-Gen AP Automation Tracker, is a monthly report that highlights the most recent accounts payable developments and automated solutions that are disrupting how businesses process invoices, track spending and earn rebates on transactions.

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