Being the "jack-of-all-trades" with a "can-do" attitude is the entrepreneur's hallmark. But that can-do attitude can do them in if they're not careful, a new survey shows.
That passion and need to be all things to all people could be clouding their perceptions of when they need to seek outside help for tasks whose outcome may put the health of their business at risk.
Small business owners admitted they lack knowledge in key areas, including legal (51 percent), taxes (36 percent), IT (34 percent) and insurance (31 percent), according to a survey of 600 small businesses with fewer than 10 employees that was sponsored by Hiscox, a business insurance company.
But more than three-quarters (76 percent) of small business owners said that either their skills gap is not a threat or that they are able to plug the gap with professional expertise when needed. And 36 percent of them reported that their passion could get them through tough times, while 40 percent said that pressure is what they signed up for when they became entrepreneurs.
"Entrepreneurs truly have to be a 'jack-of-all-trades,' yet a clear skills gap exists between their limited knowledge in certain areas and what they are actually willing to invest in," said Kevin Kerridge, small business insurance expert at Hiscox. "It is important that small business owners recognize where professional expertise is imperative. Hiring or contracting support for technical sides of running a business can save them money in the long run."
Despite the potential hazards of legal and financial errors, more business owners employ a full-time communications officer than an accountant or in-house legal counsel (8 percent and 5 percent, respectively). Only 7 percent of small business owners would opt for an accountant and/or lawyer if they could make another full-time hire.
The research also found that business owners regularly handle most office tasks themselves, all the way down to cleaning the office and making deliveries.
"While it’s in the DNA of an entrepreneur to just get things done, they can open themselves up to potential risks that can lead to business interruption, or even litigation if they try to handle key areas like legal, taxes, and insurance themselves," Kerridge said. "This has the potential to unnecessarily cause a damaging domino effect on their business that could shut its doors permanently."