Sadly, it’s still seen a black mark against many businesses to have to go through a Small Business Restructuring process – or to voluntarily take on an administrator.
However, with the big tax debts facing many Australian SMEs – and the increasing cost of carrying them from 1st July 2025 – it could be a VERY smart move.
Doing an SBR should be a badge of honour in 2025 – not a mark of shame. It’s also more justifiable than ever before – given the impact of COVID disruptions, post-COVID supply chain issues, and the ongoing cost-of-operating crisis.
If you do choose to “press reset” by doing a SBR or taking on a voluntary administrator, it means you’re a survivor and a true entrepreneur willing to face business reality. And you could well save a heap in tax debt and interest payments.
And now’s a good time – while everyone understands the massive financial pressures on SMEs.
SMEs face an unrelenting cash flow challenge every day
Running a small business is a major achievement under any circumstances – because of the unrecognised reality of the structural cash flow disruptions that SMEs live with every week
The underlying financial challenge that most SMEs face is the inconsistent cash flow through their business. The root cause of this inconsistency is a fundamental reality of the 21st century that:
The majority of small businesses have to PAY FOR what they need to operate LONG before they GET PAID.
Retailers have to buy in stock months ahead. Construction companies have to buy materials and pay subbies. Services businesses have to make payroll every fortnight and meet infrastructure costs every month.
In most industries, SMEs have to wait 30-90 days to get paid – and that creates recurring and disruptive Working Capital Cash Gaps.
Add in the last financially disruptive decade – and you realise that just staying in business is a pretty heroic achievement.
Choosing to “press reset” and undertake an SBR is evidence that you gave your business every chance and every effort AND that when the world changed drastically you faced up to that reality and dealt with it.
You won’t just save “a business” either – you’ll gave saved your workforce and protected their financial futures.
An SBR is a chance to start over – so make the most of it
An SBR is a second chance – it’s like pressing RESET and making a fresh start.
It will pay several times over if you make sure that you’ve done a strategic evaluation of what makes a business thrive – and developed a good Working Capital strategy.
“Insanity is doing the same thing over again – and expecting a different result” – multiple sources
If you do nothing new in the way you fund your business and manage your working capital, you could be condemning yourself to an ongoing, stressful SME GroundHog Day.
If you’re considering (or have survived) an SBR, then make sure you do a strategic analysis of your business Cash Flow and Working Capital reserves.
Debtor Finance and Receivables Management Finance are key success tools for SBR survivors
Sadly, while I know you’re a hero, most traditional lenders will see your SBR as a black mark.
This DOESN’T mean you’re stuck – or that you have to put your home on the line – because today there is a family of Responsive Finance tools for SMEs that you can still access. Key members of this family are:
- Debtor Finance (also called Invoice Finance)
- Receivables Management Finance
This family of business financing tools give you access to the money you’ve actually earned when you invoice AND they evaluate your customers credit – not yours.
Debt acquired by cash flow disruption can kill an SME
It’s not immediately obvious how much damage and increased debt can do – such as a growing Tax Debt.
However, for a SME on tight margins, it can be a quietly growing cancer – because once you GET behind you tend to STAY behind – whether it’s overdue Tax Debt or outstanding Supplier invoices.
Some debt is good debt – IF you can use the capital that debt frees up to improve your business. Debt that doesn’t offer a return is bad debt – and will increasingly hamstring your options.
Get strategic about your Working Capital today
Look your debt in the face – WITH EXPERT HELP from your trusted advisors and an experienced Working Capital Strategist.
Be honest about how things are today, and face up to just how unlikely it is that things will ever “get back to normal” so that you can “catch up in the future”.
And if you find that an SBR is the “reset” you need, then act sooner rather than later.
Now is the time to take action – while you can point at today’s chaotic business environment as the “why”.
Book a free Working Capital Strategy Review today to get an impartial, expert perspective on how to maximise your available cash flow and reduce your stress.
