Nearly 80 per cent of Australian small to medium businesses have reported cash flow disruptions in the past year with more than a quarter dipping into personal savings, according to a new survey commissioned by CommBank.
As the price of green beans continues to climb to record highs, some industry figures are saying this is threatening café profit margins and can leave little to no margin if something goes wrong.
According to CommBank, the most common factors impacting cash flow are declining revenue (35 per cent), low cash reserves (30 per cent), and seasonal fluctuations (27 per cent).
The vast majority (85 per cent) of surveyed businesses employ one or more specific strategies to manage cash flow, such as reviewing or decreasing expenses (34 per cent), maintaining a cash reserve (27 per cent), finding additional revenue streams (26 per cent), and increasing sales and/or pricing (25 per cent).
However, more than 27 per cent of small businesses used their personal savings or didn’t pay themselves a salary, or both, in the past year.
According to CBA Executive General Manager Small Business Banking, Rebecca Warren, cash-flow strategies are important for long-term business success, and it’s crucial business owners have the knowledge to help them apply strategies that are right for them.
“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. It’s not surprising that the economic challenges of the past year have resulted in cash-flow impacts for many Australian SMBs,” she says.
CommBank is partnering with the Australian Graduate School Management at University of NSW Sydney Business School to create a tailored course to help small business owners better understand and optimise their cash flow.
The Cash Flow Management course is online-based and includes expert advice, strategies and easy-to-use tools that will empower small businesses to manage their finances.
