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Vive La Cash Flow Revolution!

Why we want to transform cash flow for business owners
Woman holding megaphone illustration

Over half of people running their own business or freelancing define good financial health as being ‘in control of their cash flow’.

And yet, when asked, very few business owners or freelancers say that they feel this way. In fact, over two thirds of business owners do not feel in control of their money – and a further 36% directly identify feelings of stress, uncertainty, or insecurity when it comes to their business’ cash flow.

It’s a problem that doesn’t make sense – not in today’s digital world.

With the introduction of the smartphone and mobile banking, we’ve seen a step-change in personal finance – both in how we look after our money and how we talk about and understand it. Research abounds on the mental health impact of money on us as individuals – it tells us that everyone handles and manages money differently. That some of us are more confident about finance, whilst others find staying on top of their money more challenging. There are plenty of tools and communities set up to address these personal financial needs.

But what about for business owners? Our entrepreneurs and freelancers, the florists, the PTs, the family-run pharmacies, gardeners, and greengrocers?

Taking a look at the tools available for business banking and financial management for small businesses, it quickly becomes clear that the innovation in technology that we’ve seen in the last ten years hasn’t reached these sectors in any significant way.

Looking for solutions

At the start of 2020, we therefore decided to look into the attitudes and concerns of business owners and freelancers in the UK when it comes to managing their cash flow.

We were interested to see how new digital tools were being chosen, adopted, and used. We also wanted to know more about the impact of those tools in terms of their financial, personal, and mental health.

As a growing number of business owners are feeling out of control, anxious, and frustrated about their cash flow – we wanted to look at solutions. After all, at Asto, we’ve always believed that no good business should fail for lack of tools, information, or access to finance.

To find out more on solutions

The Cash Flow Revolution

Surveying 1000 business owners and sole traders across the UK, we worked with Censuswide to dig into these questions. The results were quite striking, though perhaps not surprising.

It turns out that cash flow is amongst the biggest concern for the self-employed. Nearly a quarter of our respondents (23%) are worried over how they keep a steady flow of work, one in ten are concerned about late payments (11%), and just under that specifically identify cash flow as the biggest challenge facing their business (7%). This goes up to nearly a third (31%) amongst business owners who are stressed about their finances

We also discovered that many business owners find digital tools and platforms useful for managing their money, with only 21% say they prefer not to use digital tools. Most digital tool users also credit their choices as supporting their mental wellbeing.

However, a problem arises in connecting business owners with the right tools to solve their problems. Just over a third of business owners and freelancers (38%) say they know where to find the right tools. More than half (52%) say the information targeted at business owners continues to be confusing.

With so many people reporting insecurities and stresses about managing their business finances and cash flow, we knew something needed to change.

And that’s why we’re calling for more than just innovation.

We want a cash flow revolution.

It’s time to understand your Money Mindset

Money is more than maths. It’s emotional.

And as business owners and freelancers, we all have unique relationships with money that apply to both our personal and business finances. Understanding that relationship – the mindset that you hold – impacts the way we think, behave, and relate to our business and to our cash flow. It’s why you may feel stressed when taking out a loan or why you doing your expenses manually gives you a sense of control.

Using our Censuswide research as well as interviews with business owners, we mapped out the six distinct Money Mindsets of business owners and freelancers in the UK. These are rough guides to help business owners identify themselves and address the specific challenges they face when it comes to money. These mindsets also help business owners find the tools that are right for them.

  • The Digital Collaborator – _(28% of business owners) – _aspirational entrepreneurs who find talking about money and technology essential to running their businesses

  • The Conscious Grafter – _(13% of business owners) – _confident, optimistic entrepreneurs who prioritise giving back to their community over growing profit margins

  • The Enterprising Rationalist – _(17% of business owners) – _adaptive and independent thinkers motivated to run businesses to secure their financial futures

  • The Canny Pragmatist – _(31% of business owners) – _calm and focused business owners who are prepared for the financial challenges ahead and have the tools to take them on

  • The Headstrong Traditionalist – _(40% of business owners) – _resilient entrepreneurs who tackle financial challenges in return for an independent working life

  • The Bold Risk Taker  – _(5% of business owners) – _risk takers who are focused on business growth and making money, despite being burned by bad decisions

The Asto Money Mindsets underpin The Cash Flow Revolution. They make it possible for us to start changing the conversation around business finance and understand what tools people really need to ensure their businesses can thrive.

The time is now

Our relationship with money is rarely simple – and when it comes to running a small business, money can be truly complex.

After all, it’s not just your own money you end up dealing with but that of your business, your employees, contractors and suppliers. And then there’s the thornier problems like changes to tax and pensions, updated legislation, an ailing High Street, late payments and Brexit.

Add to the mix the global covid-19 pandemic and onset of economic recession, and it’s no wonder that financial confidence is low amongst those running businesses.

The fact is that we live and work in uncertain times.

Having a sense of control over our money – particularly business cash flow – can define how people feel about running their business as well as impact their outlook on the future. And our research shows that when business owners feel like they have the right tools and technology to hand, it makes a huge difference to their wellbeing and sense of control.

Our intention with the Cash flow Revolution is to guide and challenge you – as business owners – to think about how you approach your business, how you manage your finances, and how you identify the right tools, products and information you need to handle each and every business challenge.

We want you to feel in control of your cash flow – and it starts by identifying your Mindset.