SMEs say their biggest money stress is no longer pandemic-related

By Katherine O'Chee ·
Fact Checked
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Woman business owner stressed

The financial impact of COVID-19 on small businesses may be lessening, but new research shows other pressures including cashflow and utility bills have crept up back to pre-pandemic levels. 

The report from accounting platform MYOB released this week, found that cashflow and the cost of utilities were top concerns for small to medium-sized enterprises (SMEs) over the past six months, felt by 32% of respondents. 

The bi-annual MYOB Business Monitor also revealed a growing number of SMEs have concerns around accessing business finance (up 6%) and dealing with late customer payments (up 4%). These two money worries saw the biggest jump in percentage points since December last year. 

Meanwhile, 35% of SMEs said they still feel pressure from the pandemic, but that figure is down 20% compared to the same time last year. 

The report is based on a survey with more than 1,000 small business owners and operators. 

MYOB’s general manager for SME, Emma Fawcett said small business issues that temporarily fell off the radar during the pandemic have now returned. 

“It’s an unfortunate return to ‘business as usual’ for the country’s 2.29 million SMEs with 14 of the 16 business pressures measured by the MYOB Business Monitor increasing in the last six months. This demonstrates that as COVID-19 pressure subsides, other business pressures increase,” she said. 

“SME concerns with payment times and old bugbears associated with physical presence - such as utilities like electricity and gas - are back on the table.”

Business confidence returns

Despite these growing pressures on SMEs, business owners still feel positive about the year ahead. Almost half of respondents forecasted that their revenue would be up in twelve months’ time. 

Here are some common strategies that SMEs are looking into in order to boost their revenue: 

  • Increasing the prices and margins on what they sell (30%) 
  • Retaining customers (29%) 
  • Acquiring new customers (28%) 
  • Online marketing and advertising (28%) 

Industry-wise, finance and insurance companies felt most confident about the future, with 78% predicting the economy will improve in the year ahead. This is substantially above the national average of 57%. 

But on the flipside, only 46% of businesses in retail and hospitality - sectors hit hard by the pandemic - predicted an uplift. 

Tips to boost cashflow 

Are you feeling uncertain about your business’s financial future due to issues with your cashflow? Perhaps you’re struggling to meet basic costs like utility bills or maybe your working capital is being tied up by unpaid invoices. 

Either way, there are steps you could take to tackle these concerns. Here are a few to weigh up: 

  • Look for ways to cut costs: Given that fixed expenses (i.e. those that generally stay the same) are easy to predict, they’re a good place to start if you’re looking to reduce costs to improve your cashflow. For instance, if your business is no longer using its office space five days a week, there may be an opportunity to negotiate down your rent and energy bills or shop around for a cheaper plan. 
  • Put invoice finance on your radar: If your main struggle is with slow-paying business customers, invoice finance is a type of loan that gives you access to funding now, saving you weeks or months of waiting time. With invoice finance, you would typically receive up to 85% of the invoice upfront, with the rest of the money (minus fees and charges) coming through once the customer has paid. For more information, read our invoice finance guide. 
  • Hop onto a government guarantee: In need of extra funding to set your growth plans into motion? The good news, access to finance should be easier right now, thanks to a couple of government guarantees: the SME Loan Guarantee Scheme (ends 30 June 2021) and the SME Recovery Scheme (ends 31 December 2021). The two schemes have different eligibility criteria, maximum loan amounts and maximum loan terms, but they both aim to reduce the red tape and costs around getting approved for a business loan.

For more tips, read our article on how to boost your cashflow during COVID-19, or scroll down below to start comparing business loan options today.

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