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Reading between the fine lines of business failure and success

At first glance, the picture of start-up businesses in the UK looks particularly rosy. The amount of companies that have started up has doubled since 2000 with over 5.2 million recorded in 2015.

Of these though, more than half ceased trading within five years. Not only that, many of the businesses that do survive struggle to grow into larger ones, which means the U.K. is only ranked 9th in the world for successfully growing start-ups.

So the picture isn’t as positive as it initially seems. The challenge SME’s face is how do they avoid the all too common pitfalls, so they aren’t ultimately forced to abandon their dreams and close their doors for good?

The cost of running a business, red tape and cash flow are often cited as reasons why a business fails to achieve success so could choosing a fuel card play a small part in turning fortunes around before it becomes too late?

Business failure rates by industry

When analyzing the data around business failures in specific sectors, two industries are of particular significance - transport and storage and construction. Both have a reliance on vehicles, and both have a higher than average failure rate with transport and storage at 62.6% and construction at 60.4%.

These are both industries where a fuel card could be invaluable and help a company avoid many of the issues that become seriously destabilising. A fuel card also can give a competitive edge where vehicles are an integral part of the business by reducing admin, saving money and helping a company grow.

To help provide some context, we’ve highlighted some of the general areas which business owners believe contributed to their business failing and then we look to see if a fuel card could help prevent other businesses going the same way in the future.

In a recent Telegraph survey, the top two issues behind business failures highlighted by owners were the tax system and the reluctance of banks to lend to new businesses. It’s obvious that a fuel card doesn't have a direct impact on these fundamental challenges, but when we look closer, other issues do have the potential to be positively impacted by using one.

Cost of running a business

Running a business is costly. From the staff to premises to equipment and vehicles, the list of outgoings is daunting and can often stretch a business too far to survive those all-important first few years of existence.

A fuel card has the obvious benefits of helping a business save money on fuel, but one of the other key benefits is the ability to restrict what is purchased and where.

Cards can be restricted to fuel and specific locations and the latest next-generation cards can even be tailored to allow you to pay for hotels, travel and other business expenses.

This helps to reduce the time employees spend filling out expenses forms and provides a much clearer picture of what is being spent and where all –important savings could be made. When money is being spent without monitoring it can have a serious effect on outgoings, so this level of monitoring can be valuable.

It's also worth exploring any other potential money-saving benefits like cards that include breakdown cover.

Red tape

Any business big or small will always say red tape holds them back and can be a cause of frustration. Any business that uses a combination of cash and business expense cards will generate a considerable amount of paperwork at the end of the month.

For a small business that can mean time is wasted on unnecessary admin. A fuel card has the power to consolidate all fuel use onto one account which makes it a lot easier to manage and saves valuable time on tax returns and VAT recovery.

Cash flow issues

According to a recent Independent report, two-thirds of SMEs said they knew of businesses that had been forced to close because of cash flow problems, and two in five said late payments had caused serious problems with their cash flows.

With a fixed-price fuel card, a business is issued with a new fuel price each week and regardless of the price indicated at the fuel station the cardholder pays the fixed price. Fixed prices are typically 2-3 pence per litre lower than the national average pump prices meaning a business has the potential to make some serious savings and have a positive impact on their cash flow.

Can fuel cards help reduce the numbers of businesses that fail?

In reality, a fuel card will never be a defining factor in whether a business succeeds or fails but it can certainly help address a number of the issues that have been highlighted by business owners as being the reasons for them closing their doors.

Why compare fuel cards?

Get the best value

By comparing fuel cards you can find the one that offers the best value for your requirements.

Different cards match different needs

Many fuel card features come as standard but they have different benefits and usage restrictions so find the one that’s right for you.

Weigh up your options


The best way to find the right card for your business is to compare their specific features, then you can choose with confidence.