Many British entrepreneurs are struggling with the most of basic financial concepts and processes, according to a new survey.
According to Fresh Business Thinking, a poll by accounting software company Intuit has revealed that one in five British business owners either have or intend to have a business plan.
It was also revealed that only 53 per cent understood what gross profit was, whilst just 69 per cent could correctly describe the meaning of turnover. Simpler concepts like margin and cash flow were misunderstood just under one in five respondents.
Furthermore, just six out of ten respondents were aware that the VAT tax threshold currently stood at £73,000. Failure to gain such knowledge can often leave many entrepreneurs struggling running a family business.
Speaking to The Financial Times, Intuit managing director Pernille Bruun-Jensen acknowledged that financial ineptitude was a worrying issue amongst British entrepreneurs.
He said: "Too many businesses run out of cash, manage it badly or just don't have the time or the skills to help themselves out of financial difficulty.
"In addition to accounting software which can help business owners better manage their finances, entrepreneurs need practical advice and support to feel more confident and equipped to tackle the financial challenges of starting and running a business."