A new study suggests that around 320,000 small businesses have lost money because of bad professional advice.
The research, published by Direct Line, points the finger at professionals across the board – marketers, management gurus and property consultants amongst the biggest culprits.
It’s not you it’s IT
IT professionals came out as the worst offenders, however, 44 per cent of the small businesses affected suggesting that IT consultants had advised them badly.
Management experts came in second (34 per cent) followed closely by marketing consultants (32 per cent), with the advice of property consultants (23 per cent) and communication professionals (16 per cent) also coming under attack.
Accountants (9 per cent), advertising agencies (8 per cent) and lawyers (6 per cent) came off a little lighter, their advice deemed a touch less troublesome.
The research revealed that poor advice is costing small businesses an average of £20,842 per year, with one in five businesses stating it had cost them between £50,000 and £100,000 over the course of the past year.
To make matters worse nearly half of those companies affected (46 per cent) stated that they were forced to lay off staff thanks to bad advice, while 39 per cent were forced to scale back or halt expansion plans.
On top of this a worrying 34 per cent needed to take out a loan to prop up their business, whilst just over a quarter (28 per cent) said their survival was put into jeopardy.
6.4 billion reasons to put a policy in place
Estimates off the back of the research suggest that bad advice costs a collective £6.4 billion per year, with countless small businesses forced to seek damages to counter its impact.
With that in mind, if you’re a business offering out advice it’s probably wise to put some professional indemnity insurance in place. After all, we all make mistakes.