A cafe owner working up to 60 hours a week has opened up on the "tough" reality of navigating the cost of living crisis as a new report lays bare the financial struggles.
Adam Thomsen, who has owned and operated Dovetail on Overend in Brisbane for almost a decade, said the first six months of this year were his hardest yet.
"It's been tough. There's no beating around the bush," he told SkyNews.com.au.
"My wife and I have been doing this for about nine years and the period from the start of January to now is the hardest we've had."
Mr Thomsen's comments come as a new report from accounting software company Xero showed 60 per cent of small businesses in Australia are already experiencing cash-flow problems.
The report found over a quarter of those surveyed had been forced to dip into their personal savings to keep their business afloat.
While 34 per cent were unable to pay themselves due to tough financial conditions.
The majority of businesses blamed inflation for damaging their cash-flow, with almost a quarter saying it had an "extreme impact" on their ability to generate revenue.
Most were expecting little improvement in the next six months, with 55 per cent predicting inflation to have a "high impact" on cash-flow going into the second half of the year.
Mr Thomsen said recession predictions and the "doom and gloom" in the media meant it was only a matter of time before consumer sentiment shifted and shoppers begun to reign in their spending.
A fall in customer numbers meant he had been forced to take out ads on social media "to remind people we're here," putting strain on his already tightening budget.
"This is the first time we've had to use boosting ads on Facebook," he said.
"Up until now our growth has been organic, we had a good product and people came because of that.
"This year we've had to have a weekly advertising budget just to remind people we're here."
Compounding the problems is inflation, which had sent his costs soaring, jumping 20 to 25 per cent in a year while revenue began to flag.
The price of milk, a staple for cafe owners, had risen "100 per cent" over the last three to four years he said, presenting a major challenge to profits.
Costs are now so tight Mr Thomsen is electing not to replace staff when they leave, with he and his wife picking up extra hours to compensate.
"My wife and I have had to take on a lot more work," he said.
"We're working 50 to 60 hour weeks because we haven't replaced people who have left.
"It's been very hard on both of us."
Almost half of those surveyed in the Xero report said they were concerned about their business' financial failure.
While 45 per cent said they were worried about their own financial future.
Mr Thomsen was not yet at that point, but said he was considering "any and all options" as he planned for the future.
"We're just evaluating our financial position very closely," he said.
"I'm looking at any and all options to turn our situation around."
He echoed the view of many when he criticised the efforts of policy makers attempting to tackle the problem, saying they had not done much "good" for anyone.
"I don't see that there has been a great reaction at all," he said.
"It makes me question why there we had to have so many interest rate increases.
"I don't see that it's done any good for anyone."
Mr Thomsen said closures were already underway and could get worse if "unsustainable" business conditions persist.
"There's going to be a bit of carnage," he said.
"We're already seeing cafes closing down.
"People are walking away because it's unsustainable."
Xero reported that 60 per cent of small businesses lacked confidence they could weather a financial shock.
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June 24, 2023 at 10:27AM
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Small business owner’s heartbreaking reality amid cost of living crisis - Sky News Australia
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