POOR PROFESSIONAL ADVICE has cost more than 320,000 British businesses £20,842 each in the last 12 months, according to research conducted by Direct Line for Business.
In all, misleading advice is estimated to have cost the UK’s small and micro businesses some £6.4bn.
The losses are not solely financial; about 46% of affected companies reported that they were forced to lay off staff as a result, while 30% said they had to scale back expansion plans. A fifth of micro businesses claim to have lost between £50,000 and £100,000.
IT consultants were earmarked as the group most likely to give damaging advice, followed by management and marketing consultants. About one in ten businesses said poor accountancy advice had hit them hard.
Nick Breton, head of Direct Line for Business, said: “Our research clearly highlights the devastating effect poor professional advice can have on small and micro businesses. However, the impact on an advisory firm that is facing litigation can be just as shattering. For those providing advisory services, it is important to recognise that issues can occur and clients could pursue them for compensation.”