Nearly half of Kiwi small business owners forgo their paychecks

(Source: Bigstock)

Nearly half of Kiwi small business owners are forgoing pay cheques in order to cope with cash flow problems, research by global small business platform Xero revealed.

The report, which surveyed businesses on their perspectives and behaviours on cash flow management, found 46 per cent of business owners and 60 per cent of sole traders are not paying themselves in order to keep their business running.

To handle the challenges, 52 per cent of Kiwi small businesses have increased prices while 48 per cent have sought to review and remove costs.

“Cash flow is one of the biggest challenges small businesses are facing. When you add in inflation, climbing interest rates and reduced spending from consumers, small business owners are walking a tightrope every day,” said Bridget Snelling, Xero New Zealand country manager.

The problems force owners to dip into their personal savings, work unattainable hours, and ultimately sacrifice their emotional and physical health, Snelling elaborated.

The report also found that 94 per cent of small business owners did not achieve their goals.

It added that late paid invoices are one of the biggest contributors to small business cash flow problems.

Snelling suggested that using digital tools for planning and forecasting can help business owners improve their cash flow management.

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