One in four (27%) of SMEs have not given any thought to how they will find a pensions provider to comply with auto-enrolment, according to research by NOW: Pensions.
NOW: Pensions said this was caused by a combination of factors, including underestimation of the task and a lack of clarity over auto-enrolment.
A survey of 400 UK businesses with up to 250 employees found more than half (52%) of respondents thought they would not have an issue finding a provider, while one in 10 (9%) were concerned providers might "cherry pick" business.
In addition, a third (34%) admitted they did not understand the calculations of auto-enrolment minimum contributions.
When asked how they would find a provider, a quarter (26%) of firms said they would seek help from their accountant, 16% would rely on their existing scheme provider and 12% would search the market and conduct the research themselves.
Morten Nilsson, CEO of NOW: Pensions, said business owners need to "wake up to the reality" and warned that non-compliance would risk fines of up to £500 a day.
"Auto-enrolment is fast becoming a reality for thousands of firms across the country and there really is nowhere left to hide. Although it's tempting to put it off, auto-enrolment is complex and the longer you leave yourself to plan, the easier it will be," he said.
"While most employers are confident that pension providers will be happy to accept their business, the reality is that not all providers will be willing to accept all employers and all employees on equal terms."
Businesses have different staging dates depending on the size of their workforce.