One in five small business owners would be unable to fund their living expenses for longer than a week in the event of an unplanned absence from their business.
The figures come from Bridge the Gap, a whitepaper commissioned by REST Industry Super, to probe attitudes held by Australia’s entrepreneurs and their views on retirement.
Most respondents indicated their business would not be able to remain profitable without their continued presence to drive day-to-day operations.
REST CEO Damian Hill said the research suggests gaps in financial and contingency planning for small businesses.
“SME owners are relatively unprepared for the future when it comes to planning for their financial security – in terms of both their ability to continue supporting their livelihood following an unexpected event, as well as their plans for an eventual retirement."
The research also indicated a clear majority of respondents considered the sale of their business to be very important in funding their retirement.
"SME owners put themselves at risk if they rely solely on the sale of their business – and the assumption that it will remain viable for sale – upon retirement," Hill said.