Blue Hen

Majority of Small Business Owners Don’t Pay Themselves for Months

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A majority of small business owners do not pay themselves for multiple consecutive months in order to control their business’ cash flow, according to a recent survey of 500 small business owners, conducted by Kabbage.

More specifically, 26 percent of those surveyed have gone two to six months without paying themselves, while another 25 percent have gone more than six months without pay.

“Having owned multiple small businesses before founding Kabbage, I am intimately familiar with cash flow challenges,” said Kabbage CEO Rob Frohwein. “Sleepless nights were my reality when waiting on customer checks and thinking through needed expenditures.”

According to the survey, 63 percent of respondents said they are regularly stressed or have anxiety due to cash flow concerns; 35 percent often lose sleep or have difficulty sleeping; 42 percent sacrifice much of their social life and personal hobbies; and 32 percent say their family life suffers.

So if you can provide a business owner with funding that they can handle, you might literally be saving them sleep.

The survey also found that 91 percent of small business owners spend as much as 20 hours per week on cash flow management, including payroll, invoicing and purchasing inventory.

When asked to imagine that all cash-flow tasks were taken care of, the respondents said they would spend their time very differently. Fifty-one percent said they would invest more time in sales and marketing to drive new business, while 35 percent said they would further develop their products and services. Thirty-two percent said they would spend more time with family, friends and community, and 30 percent said they would focus more time on customer service.
Small Business