SME’s concern over cashflow

by Rebecca Pike10 Dec 2018

A small business lender has conducted a study with YouGov which has shown small businesses spend more time worrying about survival than enjoying their free time, with most of this worry related to cash flow.

Commissioned by Prospa, the research showed 54% of SME owners spend 6 to 7 days a week on their business, with 28% working seven days a week.

Even when not at work, almost three-quarters said concerns around their business prevented them from relaxing during holiday periods like Christmas.

Overall, nine in ten small business owners said they felt distracted by work in other areas of their life.

Nearly two thirds said it also affects their sleep. In addition to restless nights, four in five (79%) business owners feel that at least occasionally they miss out on quality time with their family, with 28% saying they miss out frequently.

The report found that small business owners aged 18-49 years feel the pressure more than their older counterparts.

Younger small business owners between 18-49 years are more than twice as likely as those 50 years and over to strongly agree that concerns around their business prevent them from relaxing during the holidays.

Their dating lives are also impacted, with one in four under 50 saying that they have been distracted by work when on a date.

Regardless of age, eight in ten (78%) small business owners say that at least some of their business worries are related to cash flow.

Two-thirds (65%) of small business owners feel stressed during the holiday period because of cash flow problems in their business.

Furthermore, the more business owners worry about cash flow, the more likely they are to think about their business 24/7.

The incidence of cash flow related worries also corresponds to small business owners feeling that they more frequently miss out on quality family time.

Commenting on the findings, Prospa joint-CEO Beau Bertoli said, "Brokers can provide valuable support to small business owners at this time of year.

“Two-thirds are stressed and distracted by cash flow during the holidays and for many different reasons. For example, invoice-based clients are dealing with slow payments and the quiet January period, creating a cashflow squeeze.

“December is the busiest time for most retailers and staff costs are high. Meanwhile, CBD cafes and shops see a noticeable drop in foot-traffic as regular customers flock to the beach.

"Brokers should talk to their clients about how their sector, location and customer habits impact cash flow during this time. With the right funding solution they can give small business owners peace of mind.”

As a result of these findings and to help alleviate some of the stress during the holiday period, Prospa is offering business loans with no repayments due until 6 Jan to give small business owners the chance to properly switch off, even if it’s only for a few days, knowing that cash flow won’t be a problem.