Small Firms Plagued By Tardy Payers

July 31, 2007 - PRLog -- Getting customers, clients and suppliers to pay up on time is the biggest problem faced by the UK’s entrepreneurs, according to new research by UK Business Forums.

A third (32%) of respondents to the poll on www.ukbusinessforums.co.uk, Britain’s most active online forums for entrepreneurs, said late payment was their biggest business bugbear.

Dan Martin, chairman of UK Business Forums, said: “Despite achieving much success, it is clear from our research that the UK’s entrepreneurs face a host of problems with running their small business.

“Getting payment on time is particularly vital to small firms operating on a tight budget and although efforts have been made to tighten late payment legislation, entrepreneurs are still suffering.

“Research from the Federation of Small Businesses* shows that large companies are the main culprits when it comes to late payment and typically take up to 64 days to settle an invoice. With small firms making up the majority of UK businesses, they are the main victims. It’s time the late payers paid up.”

Comments from survey respondents:

“Late payment is always a problem especially for someone just starting out like myself. I get caught in a Catch 22 situation - whilst they know there is a bill lying overdue, they don't rush to pay it assuming correctly that I am not going to chase it for a while as I don't want to risk annoying a potentially large customer.”

“If I go into virtually any retail premises, I have to pay for the goods there and then, but when I do work for a retail outfit, they want a 30 day invoice! If I ask for payment on completion, I get a bemused look. Why is it ok for them to request immediate payment, but I can't?”

“I think that if I push too hard one of two things might happen. Firstly, I might lose future business if I become a pain in the rear end or secondly, it gives the impression that I am struggling by chasing every pound.”

“If you can afford to "lose" clients by being pushy, then I think you should. Maybe go through your client base and rate them as A - good B - fair and C - awful. You'll probably find that your A clients comprise about 20% of your order book. Give them terms, say 30 days. B clients get 15 days and C clients have to pay cash on delivery. You may lose a bunch of your C clients - but do you really want them?”

In other findings from the research, which surveyed 100 UK-based entrepreneurs, the ever present problem of access to finance was the main difficulty for 19% of small firm founders, while 14% complained that dealing with red tape was their main day-to-day struggle despite recent efforts by the government to reduce the burdens of regulation.

Another 16% of small business owners put supply and distribution concerns top of their list of problems, while 11% said staff management issues were a worry. A tenth (8%) admitted that technology frustrations were their main nuisance.

Notes to Editors

The research is based on a poll of 100 members of UK Business Forums during July 2007.

*Federation of Small Businesses survey, February 2006

About UK Business Forums (http://www.ukbusinessforums.co.uk)

UK Business Forums are the UK’s most active discussion forums for owners and managers of small and medium sized businesses**.

Published by Sift Media, UK Business Forums is home to over 10,000 members and generates over 2,000 posts every week. Topics of discussion include: business finance; marketing & PR; legal; franchising; e-commerce; and the highly popular ‘Time Out’ forum.

** Based on independent research conducted in May 2007 by 10 Yetis Ltd.

For more information about UK Business Forums, contact Dan Martin on +44 (0)117 915 8638 or email dan.martin@siftmedia.co.uk

About Sift Media (http://www.siftmedia.co.uk)

Sift Media is a leading business-to-business publisher specialising in online, interactive professional communities.

With a range of services including websites, email publications, industry awards and events, Sift Media delivers original, branded content to over half a million professionals in accounting and finance, HR and training, IT, marketing, customer management and knowledge management.

Did you know - £1 in every £25 spent on UK online business display advertising is spent with Sift Media?

Website: www.ukbusinessforums.co.uk