Nearly half (47%) of small businesses lost out on up to £10,000 in the last year due to turning down work contracts and orders, according to a new study.
Out of 501 companies surveyed by Hitachi Capital Invoice Finance, 26% snubbed contracts worth up to £5,000 while 21% rejected contracts worth between £5,001 and £10,000.
Almost 1 in 5 (19%) turned away work because of unfair demands from customers, whereas only 8% rejected contracts due to lack of finances.
More established companies were less likely to reject contracts or orders, but reputable firms would lose more money than less established companies when they did turn away work.
Some of the reasons for companies turning down contracts and orders included:
- contracts were priced too cheaply/would not bring in enough cash
- customers’ unreasonable demands
- lack of finances/didn’t want to risk taking out a loan.
A further 66% have not invested personal funds into their company in the last 12 months, whereas 60% did so with their personal savings.
This disproportionally affected start-ups, with 50% investing in their personal savings compared to just 20% of established companies.
Comparing different regions, companies in Wales, London and Northern Ireland turned away the most work.
The North East and the East Midlands saw a higher percentage of businesses reject less work than the year before.