What's stopping business start-ups?

Small firms struggle early on because they don't have the right tools in place to run their business effectively, according to research by NatWest.

Smarta.com reveals many With latest figures showing business failures outnumbering business births for the first time, offering more support to start-ups could be key to economic recovery. NatWest and Smarta today join with Dragons' Den star Theo Paphitis to launch Smarta Business Builder, a new online toolkit, providing first time entrepreneurs with the key components needed to develop and grow.

Of those small businesses surveyed 61% stated that cashflow was one of their most significant challenges in their first year of trading. Many risk failure by simply running out of cash as 40% admit they overestimated their sales and 58% underestimated costs. With business builder these small firms will have an accurate picture of money coming in and going out at any time.

Significantly 46% of sole traders stated they did not have a website in their first year of trading although 45% of businesses believed it would help increase sales. Surprisingly, 77% of these businesses still don't have a website to market themselves. Additionally 35% of businesses with a turnover of less than £100K did not have a business plan, 63% had no formal accountancy relationship and 80% had no legal support. Most worrying is the fact that 32% of those surveyed stated they did not have these tools because they did not know where to start in setting these up.

Star of Star of Dragons' Den and Ryman Stationery Chairman Theo Paphitis said: "At a time when we need businesses to thrive, too many good businesses risk failure because they struggle to manage the basics early on. Many small business lack the time and money to get essentials such as business plans, accountants or websites in place - getting them all in one place through Smarta Business Builder will free them up to concentrate on what they're good at and growing their business."   

Smarta Business Builder provides accounting software, business planning tools and templates, a website builder to create fully-functional e-commerce websites, bespoke legal documents, personalised and professional email and a 24hour legal helpline. All services are accessed from a single log in at a cost starting from £20 a month.

Peter Ibbetson, Chairman small business, NatWest, said: "This research shows that many businesses in the UK are at a disadvantage because they are operating without an accountant, legal support or business plan in their first year. Alarmingly one of the key reasons given for this is because they do not know where to start. We are very much committed to supporting start-ups and business growth and Smarta Business Builder will prove to be an important tool in our locker."

For more information, visit natwest.com.