SMBs are shelling out huge amounts of money on upgrading their technology every year, potentially hindering investment elsewhere, new figures have claimed.
A report from American Express and the Centre for Economics and Business Research (CEBR) found that on average, SMBs spend roughly £200,000 each year on new technologies.
Their spending has a range from £225,000 (micro-businesses with less than nine employees), to £3 million, for SMBs with 50+ employees.
On average, about a fifth of the company’s expenditure goes on new technology. The biggest cut, roughly a quarter, goes on hiring new people.
"Running a business can be an expensive affair and as our research demonstrates, there are significant costs involved when building a business," said Jose Carvalho, SVP at American Express.
"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."
He added, "More than half of SMEs are using business revenue to finance company expenses, while a quarter using personal savings. We found just over one in ten (13 per cent) use business loans or credit cards."
When it comes to location, there aren’t many surprises. London is considered the most expensive place to do business in the UK. On average, costs were above £1.8 million, average. Central England costs £1.1 million, while the South with £700,000 and the North with £525,000 were the cheapest.
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