Money may make the world go around but it seems as if the struggle to overcome cashflow issues is distracting entrepreneurs from scaling their businesses, new research from American Express reveals
It’s hardly a secret lots of entrepreneurs are concerned about their cashflow. In fact, new research has revealed a quarter of small-business leaders are kept awake at night because they worry about their company’s finances.
Having surveyed 502 senior decision makers in SMEs, American Express also revealed 46% feel that the challenges associated with cashflow steal their focus from expanding their organisations and to market them. Not only are 25% kept up at night worrying about their finances but 24% are also experiencing stress symptoms for the same reason.
And these concerns don’t come out of the blue. The researchers revealed a third of small firms that have missed a payment deadline have had suppliers withhold goods or services. Additionally, 28% have had their relationship with suppliers tested because of their cashflow issues and 35% have had to cough up additional late payment fees for missing deadlines.
But despite these worries, only half of these companies have turned to accountants or financial advisors for help. Instead they tackle the challenge of balancing their accounts with other means. For instance, 26% rely on a bank overdrafts and 12% use business loans to meet their financial commitments.
Commenting on the research, Carlos Carriedo, senior vice president of global commercial services at American Express, said: “Getting on top of cash flow doesn’t need to be as challenging as many SMEs might expect and doing so will free up their time to focus on growing their business as well as alleviating personal stress.”
Leaders shouldn’t lose focus from controlling the flow of money in and out of their organisations but in order to tackle the cash conundrum and prevent it from stealing the show, seeking some financial advice and support can be a safe bet.