More than 25% of Australia’s small business owners dipped into their savings or did not pay themselves a salary as they faced cash flow problems in the last year, according to a survey commissioned by Commonwealth Bank of Australia (CBA).
CBA said almost 80% of Australian small to medium businesses (SMBs) experienced impact to their cash flow in the last 12 months because of falling revenue (35%), low cash reserves (30%) and seasonal fluctuations (27%).
About 85% of surveyed businesses used cash flow management strategies such as reviewing or decreasing expenses (34%), maintaining a cash reserve (27%), finding new revenue streams (26%) and increasing sales and/or pricing (25%).
“However, more than a quarter of Aussie small businesses (27%) dipped into personal savings or didn’t pay themselves a salary, or both, in the last year,” the bank said in a media release.
CBA Executive General Manager Small Business Banking Rebecca Warren said it was important for crucial business owners to have the knowledge to apply the strategies that were important for long-term business success.
“It’s not surprising that the economic challenges of the past year have resulted in cash-flow impacts for many Australian SMBs,” Warren said.
“For small businesses, success often hinges on a delicate balancing act as they constantly juggle various aspects of their operations, from managing customers and employees to dealing with suppliers and vendors.”
CBA is partnering with the Australian Graduate School Management at University of NSW Sydney Business School to create The Cash Flow Management course, which is available free of charge to all 2.5 million Australian small businesses.