Small business operating on the edge

ONE in five small businesses say if they lost as few as two of their major clients they would become insolvent.

Closed sign

ONE in five small businesses say if they lost as few as two of their major clients they would become insolvent.

These businesses also said having to pay cash on delivery to suppliers would make it harder for them to carry on. And 43 per cent polled by Bibby Financial Services said they would be forced to downsize if they lost clients or their payment terms altered.

It is the latest in the gloomy picture for small businesses, particularly those in retail.

Other research out this week forecast dismal Christmas shopping, saying there would be little festive season recruitment.

Bibby Financial Services managing director Greg Charlwood said the findings, which coincided with the Federal Government's Tax Forum, pointed to a need for tax breaks for the sector.

Council of Small Business of Australia chief executive Peter Strong said the bureaucratic tasks delegated to small business sapped time and resources to spend on business.

Mr Charlwood said small businesses were under greater pressure than a year ago.

"Our Bibby barometer survey of small business proprietors showed they are under higher stress and have a more uncertain cash flow than a year ago," he said.

"They face longer delays being paid and are coping with more difficult market conditions, staffing issues and access to finance."

He said only a quarter of businesses were confident that they could manage with tightening cashflow.