If you're a small business owner dreaming of one-day retiring comfortably, new research suggests that the dream may be out of reach. According to a study by cloud accounting provider MYOB, a majority of small and medium business (SMB) owners will be unable to retire with over one-third of them currently not contributing to their own superannuation. Read on to find out more.
The latest MYOB SME Snapshot monthly survey of over 380 Australian SMB owners focused on retirement and the vendor's research found that these business operators tend to prepare for retirement after 50 years of age. Over half of small business owners under 50 years old have not done any retirement planning.
SMB operators believe that they will need around $1 million to retire comfortably but over 54 per cent of respondents have accepted that they will not reach that goal when they hit retirement age.
Over one third of SMB owners are currently not contributing to their own superannuation although they are contributing to their employees' super.
The monthly survey also highlighted that a lot of SMBs are lax with chasing up owed money from customers. Around 54 per cent waiting over six months to be paid by a customer and more than seven in ten write-off money owed to them.
"Being a small business owner means contending with multiple challenges to the financial health of your enterprise. SMBs are often forced to wait months for payment, resulting in cash flow problems," MYOB CEO Tim Reed said. "This lack of cash can then impact the owner’s ability to pay their own super, as well as other pressing payments such as wages and rent."
Cash flow is consistently revealed as a top concern in MYOB SME Snapshot surveys.