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Why nearly a fifth of SME owners are considering shutting down

Small business owners impacted by challenging market conditions need to optimise working capital to alleviate business pressure and to improve their personal wellbeing.

Small business owners are reportedly losing sleep, and their physical wellbeing is being impacted by this stress, with 17% considering shutting down their small business because of the impact it is having on their mental health and wellbeing.

The rising cost of living, customers not paying on time, and a lack of knowledge when it comes to how to best optimise their working capital are the main challenges currently causing stress for small business owners.

Released today, American Express’ Working Capital Research1 explores the impact cash flow uncertainty has on the mental health and wellbeing of Australian small business owners2 (SBOs).

The report found that 49% of SBOs say managing cash flow is the most stressful part of running their business, with 31% losing sleep over the issue. 21% claim their physical wellbeing has been affected by cash flow tension and 22% report it has put a strain on or broke down personal relationships. What’s more, 17% of owners have considered ceasing operations due to cash flow challenges impacting their wellbeing.


The research examined the factors Australian SBOs say are contributing most significantly towards their stress levels. 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 amongst the reported stressors. This is despite 79% of owners stating that managing their businesses’ working capital cycle is an important part of running their business.

Additional findings include:

  • 54% of small business owners say the stress caused by managing their business cash flow has increased since the start of the COVID-19 pandemic
  • 53% say that they rely on their customers to pay on time, otherwise they struggle to pay their own bills or suppliers
  • 28% say their business is still being affected by an emergency they experienced in the last 12 months
  • 49% use personal funds to pay for outgoing expenses
  • 35% agree that they don’t know where to start when it comes to managing their working capital cycle
  • 51% say having access to capital without interest for a longer period would help them pay off suppliers in time and give them more opportunity to invest in their business
  • 76% would use a business credit or charge card to help manage their small business cash flow

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