The very same “can-do” attitude that makes many entrepreneurs so successful could also be their downfall.
Despite 64 percent saying that legal issues should be handled by professionals, only 26 percent of small businesses actually employ full or part-time legal and/or accounting help, according to a survey by insurer Hiscox.
They are more likely to hire a full-time communications person than a legal or accounting professional.
Thirty-six percent of entrepreneurs said that their passion gets them through tough times, while 40 percent believe pressure is what they signed up for.
But that same passion or pressure could be clouding their perceptions of when they need to employ outside help. A full 76 percent of small business owners say that either their skills gap is not a threat or that they are able to plug the gap with professional expertise when needed.
“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,” says Kevin Kerridge, small business insurance expert at Hiscox.
Kerridge says small business owners must recognize that using support for certain parts of running a business can save them money in the long run.
Small business owners admit that they lack knowledge in key areas, including legal (56 percent), taxes (36 percent), IT (34 percent) and insurance (31 percent).
Hiscox, which sells small businesses insurance direct and online in real-time, said its survey included responses from 300 small business owners in the U.S. and 300 in the UK.
Despite the potential hazards of legal and financial errors, more business owners employ a full-time communications officer than accountants 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, from paying and preparing invoices to cleaning the office and making deliveries.
By doing so much themselves, entrepreneur open themselves up to potential risks that can lead to business interruption or even litigation, Kerridge says. All of which makes us wonder how many independent agents, passionate and skilled as they are, might be operating like “jacks of all trades” without the technical help and insurance protection they need.