New insights from American Express’s Working Capital Research reveal that 49 per cent of small-business owners say that managing cashflow is the most stressful part of running their business, with 31 per cent losing sleep over the issue. As a result, 21 per cent stated that their physical wellbeing has been affected by cashflow tension and 22 per cent say it has put a strain on or broken down personal relationships.
Alongside customers not paying on time, inflation and the rising costs of living, a lack of knowledge about how to best optimise their working capital strategy were among the reported stressors for small-business owners. This is despite 79 per cent stating that managing their businesses’ working capital cycle is an important part of running their business. Cashflow challenges in particular have forced 17 per cent of owners to consider ceasing operations.
“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,” Emily Roberts, Vice President and General Manager of Commercial Sales and Account Development at American Express, said.
“There are things however that owners can do to help alleviate the stress of running a business,” Roberts added. “Getting cashflow in check is one of these. Optimising cashflow puts business owners in a better position to navigate unforeseen circumstances, reinvest in their business, their people, and just as importantly, themselves. Tools such as business charge cards help to increase funds that are available for day-to-day operations and provide extra breathing space to repay.”
Alexi Boyd, CEO of the Council of Small Business Organisations Australia (COSBOA) pointed out that small-business owners are some of the most resilient people in Australia, but that economic headwinds have created an environment where they are exhausted, mentally and financially.
“One of the most underutilised and least understood aspects of running a resilient business is managing working capital,” Boyd said. “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.”
Despite the significant mental health toll that working capital – or a lack thereof – is having on Australian small-business owners, 72 per cent remain optimistic about their business’s future.
“It’s important to understand the nuances of small business and the way this affects our mental health at work,” Leanne Faulkner, Founder of Fortitude at Work and small-business mental-health advocate, said, “We live and breathe our businesses and don’t shut off from everything. 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.
“How small-business owners work, how we make decisions and how we thrive is different,” Faulkner added. “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 businesses 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.
“There is now more community support available for the small-business sector and I’d encourage all small-business owners to reach out and talk to someone if they’re feeling overwhelmed, regardless of the situation,” Faulkner concluded.
