Australian Small Businesses Struggle with Rising Costs: Xero Report

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Australian small business owners are facing significant financial challenges as rising costs and cash flow issues continue to plague them, according to a new report by global small business platform Xero.

The report, titled “Money Matters: navigating the impact of economic conditions on Australian small and medium-sized businesses,” surveyed businesses on their cash flow management practices.

Over a quarter (27%) of respondents revealed that they have had to tap into their savings to keep their businesses afloat. Additionally, one-third (34%) of small business owners admitted they could not pay themselves

“Our research uncovers some troubling signs about how Australian small business owners are coping in today’s volatile and uncertain economy, and the sacrifices they are making to keep their businesses going and employees paid,” said Leigh ONeill, Executive General Manager at Xero

According to the survey, 45% of small business owners worry about their financial future, while almost half (48%) are concerned about their businesses’ future. Only 49% feel confident in achieving their financial goals, and 60% need more confidence in handling financial shocks.

Additionally, a significant number of small business owners (57%) reported experiencing stress due to cash flow management, while half (50%) felt anxious, and almost half (48%) struggled with sleep issues.

Despite the challenges, the report revealed that many small business owners must fully utilise available tools and resources to support their cash flow. Only 38 percent use accounting software to track cash flow, and construction and trade businesses embraced the fewest tech-savvy measures.

“That’s why it’s never been more important to plan, forecast, and have a strong contingency plan in place to weather the storm and to support their positive well-being,” ONeill said.

The report highlights the sacrifices and challenges of Australian small business owners, emphasising the importance of proactive measures for their survival and well-being in an uncertain economy.

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