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Why cash flow concerns will trump Christmas cheer

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The worst is not over yet for the small business sector, according to the latest research from MYOB.

In the latest MYOB Business Monitor, it seems SMEs are bracing themselves for continued weak conditions over the Christmas period. In fact, two-thirds of business owners surveyed are pessimistic about any improvement in the Australian economy over the next 12 months, and 42 per cent expect an economic recovery to be more than 18 months away.

Over the Christmas period, 30 per cent of business owners expect lower sales, and only 29 per cent anticipate an increase, compared with 49 per cent at the same time last year.

“Today’s findings paint a stark picture of how tough Aussie business owners have been doing it over the past year,” says MYOB CEO Tim Reed. “Queensland business owners have been particularly hard hit, with 50 per cent of all business owners reporting revenue falls.”

Of those surveyed, three-quarters of business owners stated business revenues had fallen to the same level or lower than a year ago. The average revenue decrease was 27 per cent.

“With little or no prospect of a Christmas boost to sales, many businesses will need to take other action,” says Reed. “We suggest business owners talk to their business advisors or accountants to review or create a cash flow plan, particularly managing purchases.

“Managing team leave carefully is also another area to look at as this can impact on both cash flows and bottom line results. It is also important to be smart about marketing – getting online to reach more customers if your business isn’t already using the internet is a good idea.”

If you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Thursday, October 27, 2011

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