New research from Intuit QuickBooks reveals that over two-thirds (68%) of sole traders already feel burnt out as a business owner entering 2023.
Additional pressures are growing too, with the Self Assessment tax return deadline looming and more than half (52%) not having yet started their return as of 9thJanuary 2023.
The research also reveals that the vast majority (80%) of sole traders didn’t enjoy rest and recuperation over the festive break, and instead experienced feelings of anxiety, stress, or worry about their business. Nearly half (54%) said these feelings of anxiety meant they couldn’t fully ‘switch off’ from work, with 42% revealing they didn’t get as much rest as they needed from the break.
This is less than ideal as we enter a new year and a recession, and unsurprisingly, sole traders’ biggest concern heading into 2023 is the cost-of-living crisis and its impact on business costs (44%). This is closely followed by the rising cost of materials (36%) and the recession and economic uncertainty (34%).
When surveyed in the first week of January, more than half (52%) of eligible sole traders hadn’t started their Self Assessment tax return, which must be completed by the end of the month. This is another potential layer of added stress, particularly given that the average time the sole traders surveyed said it takes to complete a Self Assessment tax return is 20 hours (a 25% increase from 16 hours in the January 2022 survey).
The greatest challenge for sole traders when completing their Self Assessment is understanding which expenses they can deduct (36%), followed by finding all their financial information (34%).
However, the process could be made simpler and more efficient. 30% of sole traders still complete their Self Assessment manually, but 88% say that with the right guidance, they would invest time in January to improve their financial set up if it would make their life easier for the rest of the year.
Pauline Green, Head of Product Compliance, QuickBooks said, “While it’s tough to see so many sole traders having struggled over the festive period, it’s promising that so many are willing to invest time into improving their financial set-up.
“We know that small changes to the technologies sole traders use can so easily save time and reduce the overwhelming feelings of stress and anxiety. For sole traders in particular, AI software can quickly reduce the workload of financial admin by tracking business expenses with greater accuracy.
“This also gives them a better understanding of discrepancies or unnecessary expenditure, and means issues can be avoided or resolved faster so that sole traders can make better decisions going forward.”
Despite the personal struggles experienced by sole traders and the current economic landscape, nearly three quarters (71%) are confident about their businesses heading into 2023. This comes as 45% say their business performed above their expectations in 2022. A key reason for this confidence is that almost half (47%) of sole traders feel their business’ resilience to shock has improved having survived the challenges of 2022.
The biggest business priorities for sole traders in 2023 are the financial growth of the business (43%), healthier cash flow (40%) and a strong customer pipeline (35%).
Pauline goes on to say: “Investing in strong financial management processes will be vital to ensure business success in 2023. Sole traders can benefit from automated technologies such as being able to easily clock and record their mileage using the app to ensure accurate records, or also being directly linked to their bank, enabling accurate income and expenditure details. By making this investment in Financial Management Software, it will help sole traders work more efficiently and will hopefully give them peace of mind.”