About the study
Money conducted an independent survey of 261 Australian business owners to learn how healthy or unhealthy businesses were before the pandemic by revealing their cash flow woes. The results indicate that cash flow struggles had already been causing strife for nearly one in two SMEs.
Money surveyed owners of businesses across a range of sizes: micro (1-10 employees), small (11-50 employees), medium (51-200 employees) and large (more than 200 employees).
How common is it for business owners to go without pay?
Prior to the shutdowns and restrictions, more than half (52%) of business owners had forgone or delayed paying themselves an income due to cash flow issues within the business.
How did business owners across the country compare?
Business owners whose organisations are predominantly based in Western Australia seem to be most hard done by, with 59% admitting they had forgone or delayed paying themselves during employee pay cycles.
Nearly half (42%) said they did this occasionally and 26% said they did it often. A further 26% said they tend to pay themselves in lump sums when the business has the cash, while 5% said they have occasionally not paid themselves at all.
Among businesses mostly based in Victoria, 54% of business owners have gone without pay due to cash flow issues. More than a third (38%) of owners admit they did this occasionally and 23% said they did this often.
21% said they have occasionally gone completely without pay during pay cycles, while a further 18% said they tend to pay themselves in lump sums.
41% of business owners whose organisations are mostly based in NSW admit that they have forgone or delayed paying themselves. Nearly a third (31%) have done this occasionally, 41% have done this often, 16% have occasionally not paid themselves during pay cycles, while 13% tend to pay themselves in lump sums.
The survey also sought to discover whether business owners had employees earning more than themselves. The findings show that there was an even split among business owners, with half (50%) saying there are employees earning more.
The business sizes that have employees earning more than the boss
Large organisations were most likely to have employees on larger salaries than the boss, with 70% admitting this to be the case. This compared with 66% of small business owners, 65% of medium-sized business owners, and 29% of micro business owners admitting the same.
How much of an impact do cash flow issues have on business owners’ personal finances?
A business owner’s personal life is also heavily connected to their business. Money found that 56% of business owners – and 66% of small business owners – admit business cash flow issues in the last two years had led to financial difficulties in their personal lives.
The same could be said for 66% of small business owners, 58% for medium-sized business owners, 56% for micro business owners and 39% of large business owners.
Where financial difficulties damage the business owner's credit rating, this can affect their ability to access business or personal credit in future.
