A new survey from MYOB outlines the lack of planning by many SME owners when it comes to saving for their retirement.
The company’s SME Snapshot, a monthly survey that gauges SMEs’ views about current issues and business conditions, reveals 52% of operators under the age of 50 have done no retirement planning.
The survey also found while SMEs believes they will need around $1 million to retire comfortably, 54% of respondents will not have saved enough by the time of retirement.
Further compounding these retirement concerns, MYOB highlights recent statistics from the Association of Superannuation Funds of Australia (ASFA) that show nearly a quarter of self-employed people do not have superannuation – with just 27% of this group aged in their 60s found to have more than $100,000 in superannuation.
MYOB CEO, Tim Reed, says it is surprising to see that superannuation is not top of mind for all small business operators, given many contribute regularly to their employees’ super.
“MYOB research highlights a huge gap between what business operators know they should be doing, and what they are actually doing. We need to support our SMEs in retirement planning and emphasise the importance of regularly contributing to their own super,” Reed says.
The survey also reveals the blowout in debtor payment times faced by respondents, which could be impacting operators’ ability to contribute to their super pool.
More than half of respondents (54%) indicated that have waited more than six months to be paid by a customer, while more than seven in ten have written off money owed to them.
“SMEs are often forced to wait months for payment, resulting in cash flow problems,” notes Reed. “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.”
And with 53% of respondents in MYOB’s Business Monitor survey anticipating the timing of payment to put pressure on their business, MYOB is calling on the government to help address the cash flow issue for small business.
According to Reed, small business needs government support to help limit their cash flow challenges, and shorter payment terms is an important place to start.
“It would be encouraging to see the government implement a national prompt payment protocol to ensure small businesses are not being delayed payments by big businesses,” says Reed.
“Big business should lead here, by ensuring all SMEs are paid on time. Unfortunately, some look to use their power to implement unreasonable business practices, such as 90-day payment terms.”
Lastly, the survey gauged SMEs’ views on the recent interest rate cut in August – the majority (57%) felt it would have no impact on business confidence, while 27% predicted a positive impact.