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Why Britain needs to get financially fit

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More than one million young people are now unemployed in the UK and the top line figures released today show that a staggering total of 2.62 million people in the UK are unable to find work.   

At the same time, figures from the Office for National Statistics reveal that one in three small businesses will fail before they get to their third birthday. To my mind, these two statistics are directly related.  

Data shows that the majority of new jobs come from young, early-stage businesses that are growing fast, so if we can help more new businesses stay in business, then a direct consequence will be growth and an increased number of opportunities for young people entering the workforce for the first time.  

Poor financial management is one of the key contributors to business failure and for many business owners, managing their finances is one of the most difficult and challenging aspects of starting up. In a recent study that we conducted with 500 small business owners, 54 per cent are getting by with manual spreadsheets for managing their P&L and a surprising one in five (21 per cent) admitted to using pen and paper, offering little visibility into the state of the business and increasing the likelihood of human error, one of the biggest contributors to financial distress. 

Often small businesses are unaware that there is a better way, or are worried they need accounting knowledge to use financial management software that could save time and effort. It’s clear from our research that many small companies could do more to organize their business finances and to help radically improve their chances of success.  

In so doing they would be in a position to create many more employment opportunities for young people entering the workplace. With that goal in mind, Intuit has partnered with the Department for Business, Innovation and Skills to help 1,000 small businesses across the UK get financially fitter through a new government supported scheme of training workshops.

The scheme has the backing of the Business Secretary, Vince Cable, and Business and Enterprise Minister, Mark Prisk.   

The first of these workshops will take place at the Business Start Up Show at Earls Court tomorrow and will see over 200 small businesses owners receive practical training on tracking and improving cash flow, getting customers to pay on time, dealing with VAT as well as saving time on everyday tasks such as invoicing, expenses and calculating and reporting VAT. 

We’ve chosen to launch this during Global Entrepreneurship Week with the express aim of providing hands-on practical training to help small business owner get financially fit and be set up for long-term success.   

The scheme will then roll out across the UK through next year to provide targeted, hands on assistance.  

2012 is the year of the Olympics and it’s not just athletes that need to get fitter. We need fitter businesses as well. Too many businesses run out of cash, manage it badly or just don’t have the time or the skills to help themselves out.  

Improve this and we can radically help improve the chances of business survival rates and reverse the rising levels of unemployment that risk crippling the UK. 

Pernille Bruun-Jensen is managing director of Intuit UK. Intuit will launch the Financial Fitness initiative at the Business Start Up Show (November 17-18, 2011), one of the key events during Global Entrepreneurship Week 2011.

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Lucy Cokes
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