Small Business Owners Often Skip Paying Themselves
When you own your own business, there’s a lot of different challenges that may come up, especially when it comes to money. According to a survey by Kabbage, small business owners often skip paying themselves in order to control cash flow.
Founded in 2008, Kabbage is an online financial services platform, where small businesses can receive access to automated funding in minutes. For the survey, Kabbage ended up polling 500 successful entrepreneurs.
The survey revealed that many small business owners will go multiple months in a row without paying themselves. According to Kabbage, 26 percent of business owners went two to six months without paying themselves, while another 25 percent went more than six months without a paycheck.
“Having owned multiple small businesses before founding Kabbage, I am intimately familiar with cash flow challenges,” Kabbage’s CEO Rob Frohwein said. “Sleepless nights were my reality when waiting on customer checks and thinking through needed expenditures.”
While the results of the survey might be unsurprising to some entrepreneurs, it still speaks to the unique challenges people face when trying to launch a small business.
In fact, a survey from small business financing firm Guidant Financial found that 80 percent of Black entrepreneurs said lack of capital was the most challenging part of running a business, as reported by Black Enterprise.
What’s important to note about Kabbage’s survey is that these aren’t people whose businesses are brand new or already struggling. On average, the participants have run successful companies for 10.5 years.