Want to succeed as a small business owner? Have a mentor or an accountant. Our recent Make or Break? report shows that asking for help from mentors and advisors, and having a good relationship with your accountant, means you have a leg up. The research was timed to coincide with Global Entrepreneurship Week which kicks-off today.
Surveying 2,000 small business owners across the US and the UK, we found that those owners who collaborate with an accountant or bookkeeper, 42% of survivors describe that relationship as “excellent,” compared to 27% of those whose company failed.
This statistic shows just how important accountants are to the ongoing success of the small businesses they serve.
Those who succeed also invest in technology for increased productivity in finance. It was also found that they dedicate funds to marketing and customer service. Nearly six in 10 survivors (58%) use software to manage their finances vs. a marginal 14% of failures. Plus just shy of a third (31%) allocate resources to improving customer service, versus 20% of those in the failed camp.
Of those owners who listed a business issue as a reason for failure, a whopping 65% blamed financial problems like cashflow or access to capital. It highlights just how important the relationship between a small business and their accountant is. Their livelihood actually depends on it.
The Xero effect
Lifting survival rates and helping small businesses thrive is our business. The Make or Break Report found US and UK businesses that use Xero are markedly more likely to succeed. In the US, 95% of Xero customers survive their first year vs. 79% for the average. In the UK 97% of Xero customers make it that far compared to an average rate of 91%.
The pattern becomes even more distinct over longer timeframes. At the five-year point, 85% of Xero customers in the US are still up and running, while the industry average is 50%. In the UK the difference is greater still, with 88% of Xero customers operating after five years, compared to an industry average of just 41%.
With technology automating many of the admin tasks which previously sucked up accountant’s time, they’re able to act more like an advisor to their customers.
The flexibility provided by cloud-based software coupled with mobile is transforming how accountants help their customers. It’s also eliminating a lot of the guess work, especially when it comes to forecasting.
Sometimes small business owners just need a little help from their number-orientated friends.
Working with a mentor
Running a small business can be a lonely job. Having access to a friendly ear to brainstorm strategy or get advice can go a long way towards ensuring the future stability and viability of your company.
Our research also revealed that a third of successful entrepreneurs have reached out to a mentor or advisor compared to just 14% of respondents who ran businesses that had to shutter.
Read the full Make or Break? report here.