London tops the table as biggest business spenders
New research from American Express® has found small and medium sized enterprises (SMEs) spend an average of £1 million (£1,016,194) each on business expenditure every year. The biggest costs in this annual shopping bill include hiring new staff (24 per cent), paying suppliers (20 per cent) and investing in technology (19 per cent).
The study, conducted in partnership with the Centre for Economics and Business Research, found firms at the larger end of the SME spectrum – those with 50 employees or more – spend an average of £3 million (£3,029,033) each year on buying goods and services for their companies. Meanwhile micro businesses that typically have 1 – 9 employees, spend an average of £225,379 per year.
Furthermore, SME spending rises as businesses become older, as companies set up at least 15 years ago spend an average of £1,385,400 annually. The data highlights that getting cashflow management right from the start is an integral part of being a successful business and ensuring a smooth path to growth.
Jose Carvalho, Senior Vice-President at American Express commented: “Running a business can be an expensive affair and as our research demonstrates, there are significant costs involved when building a business. However businesses that have the ambition and drive to grow shouldn’t be deterred. By having a robust cash flow management system in place SMEs will have an essential tool to manage costs efficiently without impacting the running of the business, its staff and customers.”