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Cash flow uncertainty among top stress factors for small business owners

Managing cash flow remains one of the most stressful parts of running a business in today’s challenging market conditions, according to Australian small business owners. It’s putting a strain on their personal relationships, affecting their physical wellbeing, and causing them to lose sleep.

New research by American Express has looked into the various factors contributing to rising stress levels among Australian business owners. Apart from cash flow woes, inflation, cost of living pressures, and customers not paying on time continue to plague small business. 

“Running a small business can be incredibly rewarding, but the day-to-day stress of paying suppliers and staff, and finding new opportunities to grow, can take a huge toll on mental health, especially when the unexpected happens,” explained Emily Roberts, Vice President and General Manager of Commercial Sales and Account Development, American Express.

Over 50 per cent of respondents said they rely on prompt payments, otherwise they struggle to pay their own bills and suppliers. 49 per cent said they even use personal funds to pay for outgoing expenses. 

A quarter of Australian business owners admitted not knowing where to start when it comes to managing their working capital cycle. Because of the stress arising from such situations, 17 per cent of business owners have considered ceasing operations. 

Alexi Boyd, CEO of the Council of Small Business Organisations Australia (COSBOA), notes that Australian business owner are “some of the most resilient people” in the country who are badly affected by current market conditions.

“Economic headwinds have created an environment where they are exhausted, mentally and financially,” Ms Boyd said. 

“One of the most underutilised and least understood aspects of running a resilient business is managing working capital. This latest research makes one thing clear: small business owners are acutely aware of the challenges they face and are calling out for support to take back control of their business today and into the future.

“There is such an important role for the wider business community and government to play in providing small businesses with the tools they need to excel.”  

Arising from this research, some of the advice for small business owners doing it tough includes seeking financial advice from experts, investing in cash flow tools that can assist with flexibility and breathing room, and if possible, taking a short break from the business to gain fresh perspective.

However, this is much easier said than done. For many small business owners, much of the stress arises from living and breathing the business every day. Leanne Faulkner, Founder of Fortitude at Work and small business mental health advocate, explains the importance of understanding these nuances.

“We know lots about creating a healthy workplace in large organisations, but it’s a mistake to think small business is simply a smaller version of a big company,” Ms Faulkner said.

“Through these findings, [small business owners] say we do not work in a bubble, we rely on others in our business ecosystem to help support our ability to work well every day. Any support from big businestses to help empower our daily operations and potentially relieve some working capital stress is welcome, so we can be at our best and focus on growth.”

For additional mental health support and small business resources, check out Beyond Blue New Access For Small Business Owners, Lifeline, or Ahead For Business.

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ALSO READ: Poor mental health may be affecting nearly half of Australia’s workforce

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Rhea Laxmi Nath

Rhea Laxmi Nath

Rhea L Nath is a Sydney-based writer and editor. In 2022, she was named Young Journalist of the Year at the NSW Premier's Multicultural Communications Awards.

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