In March 2011, Discover Card’s monthly survey of owners of companies with fewer than six employees (i.e., microbusiness owners) showed that 43 percent reported experiencing temporary cash flow problems. The good news is that this figure was down seven percentage points from the previous month. The bad news is that it remains higher than its 39% average before the recession.
The thin black line in the figure below shows the measure’s three month moving average. It indicates improvement in the cash flow situation of micro-businesses since the middle of the summer of 2010.
Percent of Microbusiness Owners Reporting Cash Flow Issues
August 2006 – February 2011
Looks to me like the number hasn’t been under 30% in a while. Are microbusinesses really that poor with cash management?
Mike Newman
Our experience shows that many small businesses ignore the old adage that “The sale isn’t made ’til the money’s in the bank” and very possess a pro-active and effective credit control system.
Alt2Att
Wow. It seems like too many microbusinesses just can’t seem to control their spending. Mike had a good point…”The sale isn’t made ’til the money’s in the bank.”