Startups especially, are most vulnerable to hemorrhaging cash – with 28 per cent reported to having lost between $23,310 and $34,965 – by refusing available work. According to a study by financial services from Hitachi Capital.
Manufacturing businesses have overall refused the most work — with 42 % stating that they have turned down orders on several occasions – most of them due to the unfair demands of customers. These were reported to include measly contract offerings, unreasonable payment terms and knowledge of a customer’s bad paying history.
Andy Dodd, managing director at Hitachi Capital, said: “SMEs are unfortunately having to decline contracts and orders due to unfair payment terms and unreasonable asks, not because they can’t deliver the work. Bad payers and unrealistic contractual terms can have a huge impact on any business, especially those that are relatively small or in startup.”
“This is often part of a wider problem, not all business owners have the time and resource to chase up invoices or can risk working with an unreliable supplier. Our research from November last year found that 27 per cent of SMEs are in ‘survival mode’ with investment plans on hold, highlighting how SME’s simply cannot afford to be turning down work, which more than half are currently doing.” he added.
Aside from the day-to-day issues of managing and running their own businesses, Brexit has also had an impact. Only one in ten startup founders felt that it will not affect opportunities for them. Making it a negative prospect.
Confidence in established companies was greater though, with three quarters stating they thought Brexit would not affect the amount of work they would refuse.