Bosses have no idea of debts
January 31, 2008
ALMOST one in five owners of small firms have no idea how much money their business owes, according to new research today.
A survey of almost 1,000 bosses suggested that many were “burying their heads in the sand” over their business debts, said the Tenon Forum think tank.
Half of those questioned said their business owed money, either to pay back a loan or because of poor performance.
Carl Jackson, of Tenon, said: “In the current fragile economic climate, it’s especially important that entrepreneurs know their balance sheet inside out.
“Borrowing can bring considerable business benefits but debts must be kept under control and within the financial limits of the company.
“No matter their level of debt, entrepreneurs should put contingency plans in place to ensure these debts remain manageable, and the company solvent, if the economy takes a nosedive.”
The research also showed that more than a quarter of entrepreneurs had moderate or high levels of debt in their personal lives.