Business & Finance Feature
Avoiding the pitfalls – 7 Common Business & Finance mistakes SME’s make (…and how to avoid them)
Running a business isn’t easy, especially when it comes to managing money. From juggling day-to-day costs to planning for growth, business finance can be overwhelming, and mistakes can cost more than just a bit of stress.
From UK-specific research by Intuit QuickBooks, 57% of small business owners report having experienced cash-flow issues, with 38% unable to pay debts because of it. Many businesses that look successful on the surface collapse because their cash is tied up, delayed, or mismanaged.
At South West Business Finance, we’ve seen the most common errors business owners make when trying to navigate their finances, and more importantly, we know how to help you avoid them.
- Not managing cashflow properly
Cashflow is the heartbeat of your business. Yet it’s often pushed aside while chasing sales or managing day-to-day demands. You can be profitable on paper and still run out of cash.
How to avoid it
Use regular forecasting, keep a buffer for the unexpected, and explore cashflow loans to bridge gaps. SWBF helps you source cashflow finance designed to support growth, not hold it back.
- Borrowing too much (…or too little)
It’s easy to get caught in the trap of borrowing too much and being burdened with repayments, or borrowing too little and stalling your business plans.
How to avoid it
Work with a broker who understands your goals and helps you borrow the right amount. SWBF has access to over 200 lenders and can match you with finance that suits your stage of growth.
- Choosing the wrong type of finance
A quick online loan might feel like a win, until the repayments or hidden terms come back to bite. Many businesses default to the high street or choose finance that doesn’t match their cashflow cycle.
How to avoid it
Get advice. From invoice finance to property development funding, the right solution depends on how your business operates. We’ll help you find it.
- Ignoring hidden costs and fees
That tempting interest rate? It might not include arrangement fees, early exit penalties, or broker costs. These hidden fees can quickly turn a good deal into an expensive mistake.
How to avoid it
Always look at the total cost of borrowing. SWBF helps clients compare like-for-like options so there are no surprises later.
- Not planning ahead for growth
Many SMEs only think about finance when cashflow gets tight. But reactive finance often means fewer options, higher costs, and rushed decisions.
How to avoid it
Start planning finance around your business goals. Whether you’re hiring, relocating or investing in equipment, we can help structure funding that supports your growth.
- Overlooking alternative finance options
Traditional bank loans aren’t your only choice. In fact, many small businesses are better suited to flexible alternatives that don’t involve lengthy applications or asset guarantees.
How to avoid it
Ask about other options, like invoice finance, bridging loans, or asset finance. Our team will guide you through what’s available and help you source the right product.
- Trying to do it all alone
Finance decisions can be confusing, and time-consuming. One of the biggest mistakes business owners make is trying to sort it all themselves, without enough time or information.
How to avoid it
A broker works on your behalf, not the lender’s. SWBF saves you time trawling the internet, compares a wide panel of lenders, and helps you source business finance that truly fits.
FAQ: What People Ask about Business & Finance
Why is business finance important?
Because it supports every aspect of your operation, from everyday bills to big-picture plans. Without healthy finance, growth stalls and risks increase.
What’s the difference between a finance broker and going to a bank?
A bank offers only their own products. A broker like SWBF looks at the whole market and helps you choose what’s best for you, not just what’s on the shelf.
What’s the most common financial mistake small businesses make?
Failing to manage cashflow. Even profitable businesses can fail if cash dries up, which is why planning and the right funding support are so important.
Avoiding these common business and finance mistakes doesn’t mean playing it safe, it means being smart. Whether you’re just starting out or looking to grow, having the right financial support makes all the difference.
Looking to avoid costly mistakes? Let SWBF help you source business finance that fits your needs and goals. We make it straightforward, stress-free, and suited to the way you work.