Business confidence is rising but cash flow continues to remain an issue for Australia’s small businesses according to a Scottish Pacific’s SME Growth Index. The report which is released twice yearly, began in September 2014 to examine the pain points and growth aspirations of the nation’s small business owners.
Scottish Pacific CEO Peter Langham said the March 2018 Index shows 50% of SMEs forecasting positive growth revenue – the most since March 2016, but well short of the high of 62% in September 2014.
Two-thirds of SMEs reported better or significantly better cash flow compared to 12 months ago.
At the other end of the scale, one in four SMEs forecast negative growth (on average dipping by 6.4%), the highest average since the Index began in 2014. One in 10 SMEs say their cash flow is worse now.
“Whether business owners are optimistic or pessimistic about revenue growth and cash flow, across the board they highlight the major impact of cash flow issues on their operations,” Langham said.
Langham said the most common issues were government red tape (nominated by 71%), suppliers reducing payment terms (38%) and customers paying late (37%).
One in five SMEs said they were unable to take on new work because of cash flow restrictions.