It’s arguably Victoria’s most well known public holiday, but data from Xero suggests that it’s small businesses across the nation that are bearing the brunt of the holiday. The data reveals that only a third (32 per cent) of small businesses across the nation were cash-flow positive on Melbourne Cup Day 2016, a figure that’s dropped 7 per cent since 2014 (39 per cent).
It seems that celebrations across the country are getting bigger each year, with fewer businesses operating at full capacity on Cup Day year-on-year. Victoria is the only state with a day off for the race, but Xero data suggests that the effect of the race reaches further.
“Only a third of businesses in NSW were cash-flow positive on Melbourne Cup Day in 2016; down 7 per cent since 2014,” said Trent Innes, Managing Director of Xero Australia.
Positive cash flow is an essential indicator of the health of a business and its ability to grow and succeed.
“The Melbourne Cup is a fantastic day in the Australian calendar. And it seems to be getting bigger each year as more people spend time at race day events and less time spending money in small businesses. Our data shows that in 2014 the average cash intake of Australian small businesses dropped 34 per cent on Melbourne Cup Day, compared to the previous day. In 2016, this gap increased to 45 per cent,” said Innes
However, the ‘race that stops a nation’ does not put a halt for those working in healthcare or social assistance, which recorded the highest proportion of cash flow positive businesses (41 per cent) of any industry on Melbourne Cup Day in 2016.
“Despite many businesses reporting a decrease in cash-flow on Melbourne Cup Day, many of our Melbourne-based customers tell us that they have put strategies in place to combat this — extending trading hours or offering Cup Day specials in order to capitalise on potential opportunities.”
Trent said that the way small businesses plan for Melbourne Cup isn’t a one-size-fits-all approach.
“For some, working the whole day will provide a business boost while for others, it makes sense to commit resources to the morning and take the afternoon off. Additionally, new technology is allowing businesses to stay connected when they are out of the office, providing more flexibility to enjoy a day at the races.”