A sizeable amount of independent shop owners in ‘Portas towns‘ are unable to answer basic finance questions, according to a survey commissioned by software solutions company Sage UK.
The survey, which quizzed 216 independent shop owners, found that a third of retailers do not understand what working capital means, over half do not know what pre-tax net profit is and nearly a quarter still rely on pen and paper or Microsoft Excel to manage their accounts.
Lee Perkins, Managing Director for Start Up and Small Business Segment, UK and Ireland at Sage explained: “Financial understanding underpins every business in the UK and is key to success, no matter what sector you operate in. Retailers have come under increased pressure from nearly all sides in the last few years, and when you have to be an expert in customer service, marketing, online and everything else, it‘s not surprising that some aspects of business don‘t get all the attention you want to give them.
“Tools and software exist today to help make managing finances easier, but for any firm to be in a position to take advantage of the increasing confidence in the economy, understanding basic finance is essential.”
Sage explored financial literacy amongst the owners of more than 200 independent shops on the high streets of towns and boroughs including Bedford, Bedminster, Croydon, Dartford, Stockport and Stockton-On-Tees. All areas had been identified as having failing High Streets and were selected as part of the Portas Pilot in 2012 – a scheme designed to help rejuvenate shopping areas by implementing ideas put forward by retail guru Mary Portas.