According to a new study by debtor finance provider Bibby Financial Services - Flexible Cash Flow Solutions , Australia’s small business owners are facing increased stress but remain confident about prospects for growth.
Based on a study by Galaxy Research on business-to-business (non-retail) small business firms, the Bibby Small Business Barometer found that 52% of the respondents were more stressed now than 12 months ago with only 17% reporting less stress.
Bibby’s Managing Director, Greg Charlwood attributes the rising stress levels among proprietors of small and medium size enterprises (SMEs) to the uncertain economic outlook.
Managing cash flow was the single largest source of stress among these businesses with at least 49% of the respondents indicating it to be their biggest concern. The study also indicated that stress levels have gained pace in manufacturing and professional services more than any other industry sector in the past 12 months.
Cash flow management was closely followed by staffing issues. Three issues vied for third place among the most significant headaches: difficult market conditions, government red tape (compliance and tax administration), and lack of time to enjoy family life.
Mr Charlwood noted that staffing was more likely to be a source of stress for companies with annual turnover of $1 million or more (51%) than those earning under $1 million (39%).
Optimism about growth, despite the challenges
However, half the proprietors surveyed report that their businesses are growing despite the challenges they face with a further 29% faring just as well now as 12 months ago.
Small business proprietors are optimistic with 71% confident about the prospects over the coming 12 months, a trend that Mr Charlwood finds reassuring as small businesses are the growth engine of the economy and the sector that employs the most Australians.
Almost two-thirds expect strong to moderate sales growth over the coming 12 months with only 10% being pessimistic and expecting a decline. While manufacturing and professional services are seen as the most optimistic sectors, wholesale, trade and transport businesses do not look so bright.
Mr Charlwood adds that cash flow has become an area of concern as the payments situation has degenerated to such an extent that 47% of the respondents now wait longer to be paid for the goods and services they have sold than they waited at this time last year. Only 8% enjoy more prompt payment.
Enquiries for debtor finance have increased at Bibby with businesses looking for flexible ways to meet cash flow needs.
Bibby Financial Services helps businesses overcome problems caused due to delayed payments by providing almost immediate finance when they bill their clients, without the need to provide their home or business property as collateral.