SME owners neglecting their super

Many owners of small to medium businesses (SMEs) are still failing to take care of their superannuation, according to new research released by Suncorp.

The research, the ‘Suncorp SME vs ME Report’, has revealed that only one-in-five SME owners are making personal superannuation contributions.

The report claims that SMEs are too frequently blurring the lines between their personal and business finance – something which ultimately impacts their wellbeing.

Among the findings of the report is that one-in-three SMEs use personal finances to manage their cashflow, and a quarter of sole traders and new business owners (in operation less than three years) haven’t been paid by their business in the past 12 months.

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 Commenting on the findings, Suncorp chief executive, customer platforms, Gary Dransfield, said while business owners were satisfied with their business performance, many were overlooking their personal wellbeing to achieve business success. 

“Despite more than half of SMEs admitting it’s important to keep personal and business finances separate, our findings highlight many SMEs prioritise their business over their personal wealth and wellbeing,” Dransfield said. 

“More than two-thirds of owners have experienced personal challenges including fatigue, financial stress, loss of motivation or relationship strain because of work-related matters.”

Despite the personal sacrifices, the ‘Suncorp SME vs Me Report’ found businesses were generally satisfied and understood managing a business required a long-term view.

“Business owners aren’t motivated by instant gratification or quick success. It takes at least three years for a business owner to feel confident and satisfied about their business’s profit generation and outlook. 

“Similarly, while many new businesses don’t expect to meet their 12-month goals (84 per cent), it’s pleasing to see one third are confident in reaching their five-year goals.”

Technology and digital tools were revealed as key ingredients to business capabilities with confidence levels being higher amongst SMEs with social media, a mobile app or search engine optimisation (SEO).

“As technology and digital capabilities continue to enhance and evolve, so do the opportunities for business. We found businesses that use online or digital tools are more confident in reaching their medium-term business goals. 

“Interestingly, nearly half of SMEs with 10 plus year tenures don’t use any online or digital tools within their business which could potentially explain why business confidence and expectations of profit generation drop after the 10-year mark.” 

Being boss was revealed as the key motivation for starting a business, followed by passion and work-life balance.  

“Generally, business owners were likely to be more satisfied with their work-life balance – despite a fifth working a 60 plus hour work week – when they found time to look after their health, ensured work didn’t intrude on their personal life and completed their work within normal hours. 

“These insights reinforce the need for small businesses to make time to prioritise their wellbeing and life outside their business.