Over the past year, we surveyed over 4,500 small business owners worldwide to understand how they’re managing cash flow amidst high inflation and rising interest rates. The survey findings, compiled into a series of Money Matters reports, were released in Australia, Canada, New Zealand, Singapore, the United Kingdom, and the United States. Here are five key trends from these reports, highlighting the cash flow challenges faced by small businesses in these six countries.
In all surveyed countries, the majority of small businesses reported facing cash flow issues over the past year. The percentage ranged from 72% in the UK to 87% in Australia. Singapore had the highest share (28%) of respondents with significant cash flow issues, while the UK had the smallest share (11%). Additionally, only 13% of Australian small businesses reported no cash flow issues, compared to 28% in the UK.
Poor cash flow has led to severe consequences for small business owners, with many unable to pay themselves. This was the top impact reported in New Zealand (46%), the US (45%), the UK (41%), and Canada (31%). This inability to draw a salary significantly affects the personal finances of small business owners.
The survey also examined the non-financial impacts of cash flow issues. Stress was the most commonly reported non-financial impact across all countries. However, there were two distinct groups: the most stressed countries were the United States (84%), the United Kingdom (82%), and New Zealand (80%). The second group, consisting of Australia (57%), Canada (54%), and Singapore (53%), reported lower stress levels.
To improve cash flow, more than half of the respondents in each country reported raising their prices over the past year. The highest proportion was in New Zealand (63%) and the lowest in Singapore (53%). The median price increase across all countries was between 6-8%.
When asked if they could handle a financial shock, only 22% of UK respondents felt confident, the lowest of all countries surveyed. Interestingly, more respondents in the UK disagreed (27%) than agreed with the statement. In contrast, 53% of small business owners in Singapore believed they could absorb a financial shock, followed by 40% in Australia. This result is surprising given that Singaporean businesses reported the highest share of significant cash flow issues.
These five trends are just a snapshot of the insights from the Money Matters reports. You can dive deeper into each report to explore more similarities and differences in small business experiences across these countries. Additionally, our reports offer various tools to help manage cash flow, including advice on pricing strategies from accountants and bookkeepers and products offered by Xero, such as online invoice payments, eInvoicing, Xero Analytics Plus, and bill payments in the UK.
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