A poll carried out by PayPal UK last month showed 2/3 of SME bosses who have been running their business since before the pandemic say the last two years have been the most challenging for their business.
Almost half (47%) fear that the next 12 months could prove even more difficult, with 12% saying there is a strong possibility they may have to close. On the pressures they have faced, 44% of the 1,000 SME leaders quizzed said they work weekends, 36% have gone six months or more without a holiday, and one-third work seven-day weeks on a regular basis.
One in ten SMEs fears closure within the next 12 months.
Other challenges include maintaining a steady cash flow (29%), managing their own mental health (18%), and coping with the increase in the cost of raw materials (17%). Given this perfect storm, more than a quarter of SME owners (27%) say they are not sure that they will even be in business in the next 12 months.
Three in five small business owners agree that it’s stressful. But factor in the economic pressures on inflation, supply chains, and the cost of living, more than half (52%) of SMEs are now concerned for their future.
To keep their business afloat, SME owners are working weekends (44%), going six months or more without taking a much-needed holiday (36%) and a third are even working seven-day weeks on a regular basis. The stress and worry of running a business is keeping 62 percent of SMEs awake at night, leaving a third feeling alone and isolated due to there simply being too much going on in the world for them to process.
Poor financial well-being is evident by the quarter of SMEs ignoring the financial health of their business fearing what the true picture is with nearly half (48%) admitting they do not have an emergency fund set aside to manage any unexpected costs.
The challenges of the last two years have forced many SMEs to get on top of their finances by upskilling themselves using finance apps (31%) and learning from past mistakes (53%). In fact, one in five SMEs agree that the last two years have had a positive impact on their ability to manage their financial wellbeing with 56% feeling more financially savvy, 27% feeling back in control of their business and one in five (21%) feeling more empowered as a business owner since improving their financial knowledge.
In fact, small business owners believe that having a financially healthy business will create new opportunities for them personally including being more self-confident as a leader (45%), having savings for the future (42%), and experiencing less stress (39%).
SMEs also cited some of the most critical areas that they would change to achieve financial wellness would be to take more time back for themselves (29%) and grow their business through expansion (24%).
If you are an SME and would like support in running your business, please do get in touch to see how the CreditMan team can help.
