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Update: The Australian and New Zealand operations of Bibby Financial Services were acquired by Scottish Pacific Business Finance in late 2015 to create Australia’s largest non-bank invoice finance specialist. Welcome to our website.

Our Scottish Pacific SME Growth Index is a twice-yearly snapshot of Australia's small to medium sized business sectors showing cashflow issues that many businesses face today, below is the second of six key insights found in our September 2018 report:

SMEs not clocking off; cash flow biggest concern

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There are advantages to running your own business, but not many people go into it for an easy lifestyle.

The September 2018 Index clearly shows cash flow is the key stress point for business owners. It was cited by 79% as the issue most likely to keep them awake at night, up from 73% when we last asked this question in 2016.

The next most pressing issue is having enough time to do what is required in the business; nominated by two-thirds of SMEs, up from 55% in 2016. The third biggest cause of SME sleepless nights is dealing with customer issues (31%), linked closely with invoice payment times stretching beyond sustainable limits.

The fastest emerging issue is the potential for sudden disruption to the business model – this was nominated by only 17% in 2016 but by 25% of respondents this year.

Other stress points for business owners were supplier issues (the main problem for 19%) and trying to meet government compliance (10%).

If business owners are stressing about day-to-day operational issues, this potentially takes them away from focusing on long term strategic business and investment decisions.

Having enough time in the day is a critical issue that links closely with SMEs’ need for speedy credit approval turnaround times.

Despite technical and digital innovations, they find it hard to get away from work: on average spending around 66 hours a week working on or in their business.

No doubt this has an impact on the work-life balance and physical and mental wellbeing of those in the SME sector.

The 40-hour week is simply non-existent for business owners – fewer than 1% of SMEs said they achieved this. Three-quarters put themselves in the bracket of working 50 to 80-hour weeks.

The largest proportion (42%) are putting in 60-80 hours, with one third clocking 50-60 hours. One in six pretty much “live the business” by putting in regular 80-plus hour weeks (up from 13% in 2016, to 16.5% now).

These findings align with recent KPMG research showing start-up founders averaged 64 hours a week in their business.

It’s worth noting that in 2018 not as many are identifying as start-up businesses (this has fallen from 14% of the 2014 survey cohort, to 11%).

Other results round out our picture of the stresses facing your average Australian business owner – the number who say they are not growing, but are stable (27%) or consolidating (13%), has increased from 32% in 2014 to 40% now.

More than one in 10 (12%) say their business is contracting, up considerably from the 8.5% who were contracting in 2014.

For many SMEs, the pressure is on. The results show a heightened level of concern about the perennial cash flow issue, with the SME sector crying out for more support and attention from lenders to give them adequate credit headroom for investing in new productive capacity, as opposed to sweating plant and equipment beyond their intended working life.

Like to know more? To download the latest copy of our SME Growth Index, click here.

Our next release will be available in March 2019 and will be available on our website.

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