Business
35% of business owners pointed to declining revenue as the primary cause, while 30% cited low cash reserves. Pixabay

Nearly 80% of Australian small to medium businesses (SMBs) have felt the squeeze on their cash flow over the past year, according to a new survey by CommBank.

The new data sheds light on the financial hurdles faced by local businesses and the number of factors contributing to the cash flow crisis.

A significant 35% of business owners pointed to declining revenue as the primary cause, while 30% cited low cash reserves, and 27% indicated that seasonal fluctuations were to blame for unpredictable cash flow.

For small businesses, success often comes down to balancing many different tasks, like managing customers, employees, and suppliers. Given the economic challenges over the past year, it's no surprise that many Australian SMBs have felt the pressure on their cash flow, according to Rebecca Warren, Executive General Manager of Small Business Banking at CBA.

Warren emphasizes that cash-flow strategies are vital for long-term business success. She stresses the importance of business owners having the knowledge to implement strategies that are tailored to their specific needs.

Adapting to the challenge

Despite the tough conditions, Australian business owners are not sitting idle. Around 85% of those surveyed are actively implementing strategies to weather the storm.

The most common approach is a careful review or reduction of expenses, with 34% of respondents choosing this route. While 27% of business owners were building up cash reserves, 26% were exploring new revenue streams, and 25% were increasing sales or adjusting prices—each of these strategies is also gaining traction among small business owners.

However, a striking 27% of small business owners admitted to dipping into personal savings, skipping their own salaries, or both, over the past year in an effort to keep their businesses running.

"While it's encouraging to see small business owners take proactive steps to manage their cash flow, some of those strategies – like dipping into savings or not paying themselves a salary – may not be what's best for the business or the business owner for the long term," Warren said.